**U.
      S. SECURITIES AND EXCHANGE COMMISSION**


**WASHINGTON,
      D.C. 20549**





**FORM
      10-KSB**





x
            ANNUAL
                REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
                ACT OF
                1934





For
      the
      fiscal year ended **December
      31, 2007**





o
            TRANSITION
                REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE
                ACT OF
                1934





For
      the
      transition period from ___________ to _____________





**Commission
      File Number: 000-19644**





**CHINA
      BROADBAND, INC.**


(Name
      of
      small business issuer as specified in its charter)








**Nevada**
            
            **20-1778374**(State
                or other jurisdiction of
              incorporation
                or organization)
            
            (I.R.S.
                Employer
              Identification
                No.)





**1900
                Ninth Street, 3rd Floor Boulder, Colorado 80302**
              (Address
                of principal executive offices, including zip code)





Issuer’s
      telephone number, including area code:    ( **303)
      449-7733 (U.S. only)**





Securities
      registered pursuant to Section 12(b) of the Act:**None**





Securities
      registered pursuant to Section 12(g) of the Act: **$.001
      par value common stock**











Check
      whether the issuer (1) filed all reports required to be filed by
      Section 13 or 15(d) of the Exchange Act of 1934 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.   Yes x No o





Check
      if
      disclosure of delinquent filers pursuant to Item 405 of Regulation S-B is not
      contained in this form, and no disclosure will be contained, to the best of
      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. 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





The
      issuer’s revenues for the most recent fiscal year were **$3,004,392** .


The
        aggregate market value of the voting and non-voting common equity held by
        non-affiliates of the registrant was approximately $18,080,584 as of April
        14,
        2008 based upon the $.75 share price at which the common equity was sold.





As
      of
      March 31, 2008, 50,255,599 shares of our common stock were issued and
      outstanding.


Documents
      Incorporated by Reference: **None** .


Transitional
      Small Business Disclosure Format: **No** .









**CHINA
      BROADBAND, INC.**


**(F/K/A
      ALPHA NUTRA, INC.)**





**2007
      ANNUAL REPORT OF FORM 10-KSB**





**TABLE
      OF CONTENTS**





PagePART
                IItem
                1.
            
            Description
                of Business and Risk Factors
            
            1Item
                2.
            
            Description
                of Property
            
            22Item
                3.
            
            Legal
                Proceedings
            
            22Item
                4.
            
            Submission
                of Matters to a Vote of Security Holders
            
            22PART
                II
            
            
            
            23Item
                5.
            
            Market
                for Common Equity and Related Stockholder Matters and
                Small Business Issuer Purchases of Equity Securities
            
            23Item
                6.
            
            Management’s
                Discussion and Analysis or Plan of Operation
            
            25Item
                7.
            
            Financial
                Statements
            
            35Item
                8.
            
            Changes
                in and Disagreements with Accountants on Accounting
                and Financial Disclosure
            
            35Item
                8A.
            
            Controls
                and Procedures
            
            35Item
                8B.
            
            Other
                Information
            
            36PART
                III
            
            
            
            37Item
                9.****
            
            Directors,Executive
                Officers, Promoters, Control Persons and Corporate Governance; Compliance
                with Section 16(a) of the Exchange Act
            
            37Item
                10.
            
            Executive
                Compensation
            
            41Item
                11.
            
            Security
                Ownership of Certain Beneficial Owners and
                Management and Related Stockholder Matters
            
            43Item
                12.
            
            Certain
                Relationships and Related Transactions, and Director
                Independence
            
            45Item
                13.
            
            Exhibits
            
            47Item
                14.
            
            Principal
                Accountant Fees and Services
            
            48








**PART
      I**





**Cautionary
      Statement Concerning Forward-Looking Statements**





Some
      of
      the statements in this annual report are forward looking statements, which
      are
      subject to risks and uncertainties. These risks relate primarily to our cable
      broadband operations in the People’s Republic of China as well as our contract
      to enter into a joint venture to acquire a television programming guide
      publishing business. These risks and uncertainties could cause actual results
      to
      differ materially from those expressed in forward-looking statements.





**Forward
      Looking Statements**





This
      Annual Report on Form 10-KSB and other reports filed by China Broadband, Inc.
      (the “company” ,“we”, “us” or “our”) contains
      or may contain forward looking statements and information that are based upon
      beliefs of, and information currently available to, the management of the
      company as well as estimates and assumptions made by its management. When used
      in the filings, the words “may”, “will”, “should”, “estimates”,
 “anticipate”, “believe”, “estimate”, “expect”, “future”, “intend”, “plan”
or the negative of these terms and similar expressions as they relate to the
      company or its management, identify forward looking statements. Such statements
      reflect the current view of the company with respect to future events and are
      subject to risks, uncertainties, assumptions and other factors relating to
      the
      company. Such forward-looking statements include statements regarding, among
      other things:





·
            our
                ability to satisfy our obligations under our agreements with respect
                to
                our acquisition of the cable broadband business of Jian Guangdian
                Jiahe
                Digital Television Co., Ltd. located in mainland People’s Republic of
                China (the “PRC” or “China”),





·
            our
                ability to complete our payments relating to the acquisition of a
                television programming publication company in the PRC,





·
            a
                complex and changing regulatory environment in the PRC that limits
                our
                ability to pay dividends, currently permits only partial foreign
                ownership
                of certain PRC based businesses and that requires us to negotiate,
                acquire
                and maintain separate government licenses to operate each internet
                business that we would like to acquire (or any other business we
                would
                like to acquire in the PRC),





·
            our
                ability to obtain government consent to introduce certain new services
                to
                existing or new customers,





·
            our
                ability to implement complex operating and revenue sharing arrangements
                that will enable us to consolidate our financial statements with
                our
                prospective partially owned PRC based business or joint ventures,
                and to
                modify and adapt these business arrangements from time to time to
                satisfy
                United States accounting rules,





·
            our
                ability to enter into agreements with and to consummate acquisitions
                of
                businesses in the PRC in the Shandong region and
                elsewhere,





·
            socio-economic
                changes in the regions in the PRC that we intend to operate in that
                affect
                consumer internet subscriptions,





·
            the
                ability of the PRC government to terminate or elect to not renew
                any of
                our licenses for various reasons or to nationalize our industry,
                and





·
            our
                anticipated needs for working
                capital.





Although
      we believe that the expectations reflected in the forward looking statements
      are
      reasonable, we cannot guarantee future results, levels of activity,
      performance or achievements. Except as required by applicable law, including
      the
      securities laws of the United States, we do not intend to update any of the
      forward-looking statements to conform these statements to actual
      results.










**Item
      1. Description of Business**


China
        Broadband, Inc., a Nevada corporation, was formed on October 22, 2004 pursuant
        to a reorganization of a California entity formed in 1988. We acquired China
        Broadband, Ltd., a Cayman Islands company (“China Broadband Cayman”) which had
        existing PRC based operations in the cable broadband internet business
        on January 23, 2007, and effective May 24, 2007 changed our name from Alpha
        Nutra, Inc. to China Broadband, Inc.
 
 We
        own
        and operate, through China Broadband Cayman’s indirect subsidiary in the PRC
        which we acquired in 2007, a cable broadband business based in the Jinan
        region
        of China. In early 2008, we executed definitive agreements to acquire and
        have
        tendered our initial required payments for, a newspaper and periodical
        television programming guide business in the Shandong region of China which
        is
        described in more detail in the “Recent Developments” subsection at the end of
        this “Item 1. Description of Business” section.
 
 All
        references herein to the “Company,” “we,” “us” or “our” refers to China
        Broadband, Inc., f/k/a Alpha Nutra, Inc. prior to our acquisition of China
        Broadband Cayman, and to the Company and the business of China Broadband
        Cayman
        and its indirect operating subsidiaries in the PRC thereafter. See “Risk
        Factors” and “Recent Events” below for additional information. All
        revenue amounts from revenues in the PRC are stated in U.S. dollars as converted
        from PRC Yuan (“RMB”) at average exchange rates of during the years in which
        presented for each dollar, rounded to the nearest dollar, unless otherwise
        indicated.
 
 Investments
        in companies such as US with China based businesses such as ours involves
        a
        significant degree of regulatory risk in that the ownership of private
        enterprises in China is heavily regulated and subject to changing rules and
        regulations that could prevent us from recognizing revenues in our intended
        manner or from operating or controlling businesses in China. China also has
        the
        right, among other things, to de-privatize our current or future business.
        (see
“Risk Factors” section below).


**Corporate
      History**


We
        are
        currently an operator of a PRC based cable broadband business which we acquired
        in early 2007 (see “Acquisition of China Broadband Cayman” below) with
        approximately 58,000 cable broadband internet subscribers in the Jinan region of Shandong, China. We acquired and operate
        this
        business through our indirect subsidiaries in the PRC. The Company’s predecessor
        corporation was organized in 1988 in California under the name “TJB Enterprises,
        Inc.” as a blind pool/blank check company formed for the purpose of seeking a
        merger with a private operating company. We operated various businesses and
        underwent various reorganizations from inception through January of 2003.
 
 Pursuant
        to a plan of reorganization approved by a bankruptcy court, TJB Enterprises,
        Inc. was ordered to acquire the business of Lets Talk Health (“LTH”) by issuing
        3,000,000 shares of common stock to the shareholders of LTH, which was completed
        on January 1, 2004 and on October 22, 2004, we reorganized our corporate
        structure into a Nevada corporation by merging into a wholly owned subsidiary
        created for this purpose, Alpha Nutraceuticals, Inc.





On
      January 27, 2005, we changed our name to Alpha Nutra, Inc.





On
      June
      30, 2005, we entered into a Stock and Asset Exchange Agreement with GMGH
      International, LLC and Golden Tones International, LLC whereby we sold of our
      operating companies to them by exchanging 100% of the Avidia Nutrition interests
      and Let’s Talk Health, Inc. shares of common stock held by us for 100% of the
      Alpha Nutra, Inc. shares of common stock held by GMGH, Golden Tones and each
      of
      the respective owners of GMGH and Golden Tones, or in aggregate, 10,465,333
      shares of our common stock, all of which was retired. Accordingly, following
      the
      exchange, GMGH and Golden Tones owned 100% of Avidia Nutrition and Let’s Talk
      Health, Inc., and we had no significant operations until our acquisition of
      China Broadband Cayman in January 2007.





**Acquisition
      of China Broadband Cayman**


On
        January 23, 2007, pursuant to a Share Exchange Agreement, we acquired all
        of the
        shares of China Broadband Cayman from its four shareholders in
        exchange for 37,865,506 shares of our common stock, par value $.001 per share, resulting
        in such shareholders controlling the Company. At the time of the closing
        of the
        Share Exchange Agreement, China Broadband Cayman was in the process of
        acquiring, through its PRC subsidiary (See “Chinese Holding Company Structure”
below) pursuant to a Cooperation Agreement, a 51% controlling interest in
        an
        operating broadband cable internet company
        based in the city of Jinan in the Shandong Region of China, which acquisition
        resulted in the completion of the transfer of operations and assets to our
        PRC
        subsidiary effective on April 1, 2007 (See
        “Acquisition of Jinan Broadband” in this section, below) .
        The
        Cooperation Agreement provides that the operating business’ operations and
        pre-tax revenues would be assigned to our 51% owned Jinan Broadband subsidiary
        in the PRC for 20 years, effectively providing for an acquisition of the
        business. In consideration for this 20 year business and management rights,
        we
        paid approximately $2,572,000 in March 2007 and approximately $3,200,000
        in
        March 2008. These transactions are described in more detail below and in
        our
        previous reports filed with the Securities and Exchange Commission and exhibits
        to such filings. This business is our only operating business as of March
        of
        2008.


1


As
        part
        of the Share Exchange Agreement, we appointed new management and also assumed
        the obligations of China Broadband Cayman under $325,000 principal amount
        of 7%
        Convertible Promissory Notes issued by them in late 2006, which were convertible
        into 1,300,000 shares of our common stock, as well as other related obligations.
 
 Simultaneously
        with the closing of our acquisition of China Broadband Cayman, we consummated
        a
        $4,000,000 equity financing wherein we sold an aggregate of 8,000,000 shares
        of
        our common stock and 4,000,000 warrants to purchase common stock at $2.00
        per
        share.
 
 Effective
        as of the closing date of the Share Exchange Agreement on January 23, 2007,
        new
        members of management were appointed to the Board and as executive officers,
        and
        our officers and directors at the time, Mark L. Baum and James B. Panther,
        II,
        resigned from all officer and director positions with the Company.
 
 The
        material terms of the Share Exchange Agreement with China Broadband Cayman
        and
        its shareholders on January 23, 2007, resulting in our becoming an operating
        entity, were that:




·
              We
                  acquired 100% of the shares of China Broadband Cayman from its
                  four
                  shareholders (the “Broadband Shareholders”) in exchange for 37,865,506
                  shares of our common stock, resulting in China Broadband Cayman
                  becoming
                  our wholly owned subsidiary and its four Broadband Shareholders
                  owning
                  over 78% of our common stock,·
              We
                  funded, with the proceeds of our simultaneous $4,000,000 equity
                  financing,
                  the first of two payments of the acquisition of the 51% interest
                  in Jinan
                  Broadband of approximately $2,572,125 including expenses, the second
                  payment of which was made in March 2008,·
              We
                  assumed liabilities of China Broadband Cayman under the $325,000
                  principal
                  amount of 7% Convertible Promissory Notes issued by them in late
                  2006,
                  which, by their terms, were convertible at $.25 per share of our
                  common
                  stock for an aggregate of 1,300,000 shares and to pay interest
                  thereon,
                  all of which have since been converted as of February 28, 2007,
                  with
                  interest paid in cash through such date,·
              We
                    assumed certain obligations of China Broadband Cayman to issue,
                    and have
                    so issued, 48,000 shares to WestPark Capital, Inc., as part of
                    the
                    consideration for acting as placement agent for China Broadband
                    Cayman in
                    connection with placement agent services rendered by it relating
                    to the
                    sale of its 7% Convertible Promissory Notes, in
                    2006,·
              We
                  have assumed obligations of China Broadband Cayman under its registration
                  rights agreement, to register all shares issued upon conversion of
                  the 7% Convertible Promissory Notes and the 48,000 shares issued to
                  WestPark Capital, Inc. As these shares were not registered, for
                  the year
                  ended December 31, 2007 we were required to issue 170,855 shares
                  as a
                  penalty to said shareholders, which were issued in March 2008,·
              We
                  issued 500,000 warrants to BCGU, LLC, an entity beneficially owned
                  by Mark
                  L. Baum, our outgoing director, executive officer and former principal
                  shareholder, as consideration for professional and related services
                  rendered, which warrants are exercisable at $.60 and expire on
                  March 24,
                  2009 (which have subsequently been extended),·
              We
                    agreed to a “leak out” agreement with respect to the 37,865,506 shares
                    issued to the Broadband Shareholders and with respect to shares
                    held
                    beneficially by Mr. Baum, our outgoing executive officer and
                    director,
                    which leak out agreement has since been terminated so as to facilitate
                    our
                    convertible debt and warrant financing in January 2008, (see
“Recent
                    Developments” below),·
              We issued
                3,974,800
                warrants exercisable at $.60 per share with an expiration date of
                March
                24, 2009 (which have subsequently been extended) to Maxim Financial
                Corporation as a consulting fee and in exchange for funding operating
                and
                other business activities of China Broadband Cayman prior to the
                Share
                Exchange Agreement and in exchange for entering into a pass through
                lease
                with us and waiving past and future rent through December 2007 under
                such
                lease,·
              We
                  entered into employment agreements with certain new members of
                  management,
                  which employment agreements have since been
                  modified.





Additional
      information relating to this change of control, the business acquired, and
      related financial statements, can be found in our Current Reports on Form 8-K
      dated January 23, 2007 and April 1, 2007, each as amended and exhibits
      thereto.




*Accounting
      Treatment of Acquisition of China Broadband Cayman*





The
      acquisition of China Broadband Cayman (and its PRC based subsidiary) has been
      accounted for as a reverse acquisition of Alpha Nutra, Inc. with China Broadband
      Cayman as the accounting acquirer, with no adjustment to the historical basis
      of
      the assets and liabilities of China Broadband Cayman, and the operations were
      consolidated as though the transactions occurred as of the beginning of the
      first accounting period presented in the accompanying consolidated financial
      statements.


**Simultaneous
        Closing of $4,000,000 Equity Financing**
 
 Simultaneously
        with the closing of our acquisition of China Broadband Cayman on January
        23,
        2007, and as a necessary condition thereto in order to fund our first payment
        for the acquisition of the broadband business in China, we conducted the
        first
        closing of our private offering pursuant to which we entered into subscription
        agreements with investors for the sale of 6,000,000 shares of common stock
        and
        3,000,000 Redeemable Common Stock Purchase Warrants, exercisable at $2.00
        per
        share (the “Investors Warrants”). This offering was conducted through WestPark
        Capital, Inc. as placement agent, on a “best efforts, $3,000,000 minimum,
        $4,000,000 maximum” basis. During the six months ended June 30, 2007 we raised
        an additional $1,000,000 such that we sold the aggregate maximum of $4,000,000
        in this offering consisting of an aggregate of 8,000,000 shares and 4,000,000
        warrants to accredited investors. We granted the investors registration rights
        in connection with this offering and compensated WestPark Capital, Inc.,
        our
        placement agent, with a placement agent fee consisting of $320,000 plus
        expenses, and issued to them 640,000 warrants to purchase common stock at
        $.60
        per share during the year ended December 31, 2007. We also agreed to extend
        the
        expiration date if all of the forgoing warrants pending receipt of certain
        releases. (See “Settlement Agreement” below).


2





We
      used
      $2,572,000 of the proceeds of this offering from the first closing (inclusive
      of
      expenses) to pay the first installment of our acquisition of a 51% interest
      in
      the China based cable internet business.





**Acquisition
      of Jinan Broadband**


At
        the
        time of the closing of our acquisition of China Broadband Cayman, it was
        a
        party, through its wholly owned PRC subsidiary, to a Cooperation Agreement
        (the
“Cooperation Agreement”) with Jian Guangdian Jiahe Digital Television Co., Ltd.
        (“Jinan Parent”) to acquire a 51% controlling interest in an operating broadband
        cable internet company
        based in Jinan, China, sometimes referred to herein as “Jinan Broadband.” The
        Cooperation Agreement provides that the operating business’ operations and
        pre-tax revenues would be assigned to our Jinan Broadband subsidiary for
        20
        years, effectively providing for an acquisition of the business. We have
        paid
        $2,572,000 of our net proceeds from the first closing (inclusive of expenses)
        of
        our private equity offering in January 2007, for payment to Jinan Parent
        in
        exchange for ownership by our China based Wholly Foreign Owned Entity
        (“WFOE”) of 51% interest in Jinan Broadband and entry into the Cooperation
        Agreement and an Exclusive Service Agreement. This acquisition was completed
        in
        late March of 2007 with the completion of the transfer of assets on April
        1,
        2007, even though we commenced certain operations of this entity prior to
        such
        time. In consideration for this 20 year business and management rights, we
        paid,
        in addition to the approximately $2,572,000 initial payment above, an additional
        approximate 23 million RMB. This final payment was made in March 2008 in
        the
        amount of $3.2 million.
 
 In
        addition, we entered into various agreements that relate to our revenue sharing
        obligations and management rights of this business. Moreover, Jinan Broadband
        entered into an Exclusive Service Agreement with Jinan Radio & Television
        Network, the only cable TV operator in Jinan, the capital city of Shandong,
        and
        Jinan Parent. Pursuant to the Exclusive Service Agreement, the parties will
        cooperate and provide each other with technical services related to their
        respective broadband, cable and internet content-based businesses with the payment of service fees to each other.




The
      general business terms of this acquisition are, in relevant part, as follows:




·
            We
                received a business license from the local Industry and Commerce
                Bureau,
                that enabled us to complete the acquisition and operate the business
                of
                Jinan Broadband,




·
            Our
                WFOE in China, which is wholly owned by our China Broadband Cayman
                subsidiary, owns the 51% interest in Jinan Broadband with the seller
                of
                this business, Jinan Parent, owning the remaining 49% and maintaining
                certain control under the Exclusive Cooperation Agreement,




·
            Jinan
                Parent, Jinan Broadband and Jinan Radio and Television Networks Center,
                entered into the Cooperation Agreement providing for the management
                terms
                and rights and revenue sharing rights between us and Jinan
                Parent,




·
            Jinan
                Broadband entered into an Exclusive Service Agreement with Jinan
                Radio and
                Television Network and Jinan Parent pursuant to which the parties
                will
                cooperate and provide each other with technical services related
                to their
                respective broadband, cable and Internet content-based
                businesses.




**Chinese
      Holding Company Structure**


Our
        Company has an offshore holding structure commonly used by non-Chinese investors
        that acquire operations in China and make foreign investments of equity,
        since
        Chinese regulations do not readily permit foreign ownership of certain mainland
        Chinese businesses such as telecommunications or cable and related value-added
        services. Our wholly owned subsidiary, China Broadband Cayman, owns 100%
        of our
        wholly foreign owned entity ( *i.e* .,
        the
“WFOE” or “BCB Network”), Beijing China Broadband Network Technology Co., Ltd.,
        a Beijing, China corporation. Pursuant to the agreement, our WFOE in turn
        owns
        51% of the operating company, Jinan Broadband, whose other 49% owners are
        Jian
        Guangdian Jia He Digital Television Co., Ltd. ( *i.e* .,
“Jinan
        Parent”) and certain of its affiliates. Jinan Parent in turn is owned by Jinan
        Radio and Television Networks Center. Through the Exclusive Cooperation
        Agreement and one or more similar operating agreements among our WFOE
        subsidiary, Jinan Parent and Jinan Broadband, we manage and control the
        operations of Jinan Broadband subject to certain oversight provisions, and
        receive the economic benefits derived from its operations. Our WOFE has also
        recently (early 2008) entered into an agreement to acquire, through a joint
        venture enterprise, a Shandong based television programming guide business
        described under “Recent Developments” below.




3





The
      following chart depicts our corporate structure after the closing of the above
      offering and acquisitions:











**About
      Jinan Parent and the Jinan Broadband Business Acquired**





Jinan
      Parent, the entity that sold its cable broadband business to us, is an emerging
      cable consolidator and operator in China’s cable broadband market. According to
      annual research report issued by CNNIC in July 2006, Jinan Parent is one of
      China’s top five cable broadband service providers among China’s over 1,000
      municipal or county cable TV network operators. Jinan Broadband is, after the
      closing of our acquisition, a subsidiary that is 49% owned by Jinan Parent
      and
      51% owned by our WFOE subsidiary, and is operated in accordance with the
      Exclusive Cooperation Agreement and one or more operating agreements, including
      the Exclusive Service Agreement. Jinan Broadband operates out of its base in
      Shandong where it has an exclusive cable broadband deployment partnership and
      Exclusive Service Agreement with Jinan Radio & Television Networks Center,
      the only cable TV operator in Jinan. Pursuant to the Exclusive Service
      Agreement, the parties cooperate and provide each other with technical services
      related to their respective broadband, cable and Internet content-based
      businesses.





Currently,
      the only broadband services available in the Jinan region are through cable
      and
      high speed internet lines. Additionally, satellite internet cable connections
      are not currently available in Jinan, China. We believe that China Net Com,
      Inc., which provides non-cable broadband internet service, serves 220,000
      customers in Jinan. We also believe that we compete on the basis of more
      favorable rates and our ability to provide a variety of interactive media
      services through a partnership with Jinan Center. Finally, cable enjoys a high
      household penetration rate in urban areas and our internet service is
      competitively fast and reliable. (See www.jinan.gov.cn ).
      The
      broadband internet business in China has limited competition, since we were
      granted an exclusive license and right to do so via cable in the Jinan region.





We
      also
      do not rely on any particular customers for our business.





4




*Licenses
      and Government Permits*





At
      the
      cornerstone of Jinan Broadband’s regional rollout strategy is Jinan Radio and
      Television Network Centers’ (“Jinan Center”) flagship role in cable broadband
      services in Shandong, as well as throughout China. Because of its unique roll
      as
      a subsidiary of a cable network operator, Jinan Parent holds various licenses
      and contracts that we will be dependent upon in whole or in part, including,
      without limitation:




**Description**
            
            **License/Permit**Internet
                Multi-media Content Transmission
            
            License
                No. 1502005;Radio
                & Television Program Transmission & Operation Business
            
            Permit
                Shandong No. 1552013,Radio
                & TV Program Production & Operation License
            
            Shandong
                No. 46,PR
                China Value-added Telecom Service License
            
            Shandong
                No. B2-20050002,PR
                China Value-added Telecom Service License
            
            Shandong
                B2-20051013.





Through
      Jinan Broadband’s Exclusive Cooperation Agreement with Jinan Parent and Jinan
      Center, the Company enjoys benefits of the above licenses that allow the Company
      to roll out cable broadband services as well as to provide value-added services
      of radio and TV content in Shandong province.





**Business
      Strategies**





***Focus
      on Shandong Region***





Based
      on
      information available to us from www.Jinan.gov.cn ,
      Shandong had a population of approximately 92 million and had the second highest
      gross domestic product (“GDP”) ranking in 2005. Based on information from
      Shandong Branch of SARFT (State Administration of Radio Film & Television),
      in past, Shandong had a consolidated cable television customer base of
      approximately 10 million. Shandong currently has approximately 1 1 million
      households with cable television access, approximately 0.5 %
      of whom
      subscribe for cable broadband internet access or broadband services offered
      by
      cable operators. Shandong is served by 17 municipal cable television operators,
      including Jinan Parent. With a population of approximately 5.9 million, Jinan
      Center serves approximately 1.3 million cable television households and has
      approximately 40,000 cable broadband internet users. All population and GDP
      statistics in this section are provided by Jinan Municipal Government and can
      be
      viewed without charge at ( **www.jinan.gov.cn** ).





When
      we
      acquired Jinan Broadband in early 2007, we had approximately 45,000 subscribers
      and, through internal growth have expanded our subscriber base to April 58,000
      as of December 31, 2007.





We
      believe that the Shandong regional market and high cable access rate provides
      great market potential for expanding our current and future cable broadband
      services especially when Digital TV services and interactive Digital TV services
      offered by Jinan Cable operator are picking up more subscribers. We intend
      to
      develop and evolve our market strategy on an ongoing basis based on our results
      in the Shandong region.





***Bundle
      with Direct TV Rollout***


We
        believe that Chinese cable companies are exerting efforts to digitalize cable
        networks which we believe will increase the use and availability of digital
        STB
        (Set-top-box) in Shandong province. According to SARFT’s DTV timetable (China
        Cable TV Digitization Timetable **http://www.sarft.gov.cn/manage/publishfile/24/603.html** ),
        by
        2008 certain of China’s coastal areas must deploy all digital cable television
        and shut down their analog television services step by step. By 2015, SARFT
        intends for the entire country to deploy all digital cable television and
        cease
        providing analog television transmission services. This will require the
        conversion of current “analog” cable customers into “digital” or pay television
        cable subscribers. Analog cable customers currently pay on average $1.50
        per
        month for cable television service. Digital cable customers with STB shall
        pay
        $3.50 per month, as a basic fee. We hope to capitalize on the massive
        digitalization campaign initiated by SARFT, by bundling cable broadband services
        in the digital STB rollout campaign.


One
      of
      the key marketing strategies that we intend to employ is to bundle cable
      broadband service offerings within the digitalization campaign in the Jinan
      area. The terms of our exclusive service agreement with Jinan Parent and Jinan
      Center provide that they will provide us the first right to market and sell
      set-top-box bundled services when it is rolled out by them in the Jinan region.
      In order to push for digitalization, the cable operators in Shandong are
      subsidizing Set-top-boxes to offer them for free to selected high-end cable
      television customers. In new territories that do not already have cable, we
      may
      also be required to subsidize Set-top-boxes. Jinan Parent provides subsidies
      to
      plug-in cable broadband features on to the current Set-top-boxes platform.
      Our
      success will be dependent, in part, on our ability to work with Jinan Parent
      and
      Jinan Center to distribute such Set-top-boxes to selected cable television
      customers located in more affluent communities. While the cable broadband
      feature is offered as optional to digital Set-top-boxes users, with careful
      choice of deployment targets, we will attempt to convert as much as 30% of
      the
      digital cable television subscribers to cable broadband customers. 100% of
      the
      revenue of successfully converted cable broadband users goes to Jinan Broadband.
      Jinan Parent and Jinan Center enjoy returns through their 49% equity ownership
      in Jinan Broadband.




5




***Growth
      through Acquisitions***





To
      augment our product offerings and create other revenue sources, we may work
      with
      strategic partners to deploy value-added services to our cable broadband
      customers.




We
      intend
      to continue to increase our revenues by increasing our current subscriber base
      but, more effectively, by increasing the areas in which we are permitted to
      operate and provide cable broadband service and to expand by acquisition of
      new
      regions or business. In order to effectuate this we would have to acquire
      additional cable broadband operators in other regions, and will require
      additional capital.





In
      addition, we intend on acquiring businesses that we believe are synergistic
      or
      complementary to our own, such as the business of Shandong Newspaper, a
      television programming guide/periodical business in the Shandon province of
      China, described below.




If
      we are
      not able to expand by acquisitions, then we will not be successful. No assurance
      can be made that we will be able to identify and complete acquisitions of,
      new
      business targets or that we would be able to fund their acquisition. See “Recent
      Developments” below.





**Customers**


Since
        acquiring Jinan Broadband we have increased our subscriber base from
        approximately 40,000 monthly subscribers to approximately 58,000 subscribers
        as of December 31, 2007. To
        most
        cable TV customers, cable broadband offers an alternative to DSL broadband
        services provided by local telecom carriers. We believe that cable operators
        have the natural advantage of bundling interactive value-added services like
        video-on-demand and other interactive content through its digital TV services.
        While telecom carriers are positioning themselves to offer value-added services
        of content nature to TV screens in the form of Internet Protocol
        Television, often referred to as “IPTV”, ** management
        believes that the high entry barriers on IPTV regulation in China still blocks
        the service offerings from telecom carriers. We do not rely on any particular
        customers for our business.


**Competition**





We
      believe that local telecom carriers that offer non-cable internet services,
      represent our major competitors for our cable broadband service. Telecom
      broadband service providers like China Netcom, a telecom carrier in the Shandong
      province of China, is a dominant broadband service provider in most of the
      Company’s target cities.





While
      telecom carriers hold “last mile access” like fixed phone lines to most urban
      households, we believe that cable operators enjoy more competitive advantage
      by
      owning last mile connections of a much larger bandwidth. In urban areas that
      we
      target, a large number of households have both fixed phone line and cable
      television access. Many of these homes currently have phone line based internet
      access.




Cable
      operators in China have to purchase internet connections from telecom carriers.
      Local telecom carriers that we compete with, however, do not need to pay for
      internet connection bandwidth which increases their profit margins in this
      sector over broadband service providers.




Local
      telecom carriers are actively marketing broadband services on national,
      provincial, as well as local levels in China. We believe, however, that the
      ability for cable operators to bundle cable broadband with digital Set-top
      box
      marketing efforts will help increase penetration of cable broadband service.
      In
      addition, we believe that the quality of cable based broadband services is
      higher and more versatile. For example, we also believe that we could easily
      add
      voice over internet protocol telephony service (known as “VOIP”), with limited
      added costs to us or the end user. While we do not have current plans to provide
      VOIP service in the near future, we anticipate that, should we ever wish to
      enter into this business we would do so with a strategic partner (and subsequent
      to PRC regulatory approval) and we estimate it would it would take 9 to 12
      months from the date we determine to enter into such business.




6




**Intellectual
      Property and Other Agreements**





We
      are
      not a party to any royalty agreements, labor contracts or franchise agreements
      and, other than our right to own and operate Jinan Broadband, we do not
      currently own any trademarks. We intend to apply for trademarks for the regions
      in which we operate, such as with respect to Jinan Broadband.





**Development
      Activities**





Prior
      to
      our acquisition of Jinan Broadband, Jinan Parent spent approximately $500,000
      (unaudited) in 2005 and $700,000 (unaudited) in 2006 in the development of
      new
      technologies and the expansion of cable access. We have not invested any funds
      into the business of Jinan Broadband and do not foresee expending material
      sums
      on research and development in the near future.





**Industry
      Structure and Government Regulation**




There
      are
      various barriers to entry into the cable or internet service provider business
      in China and to expansion of our value added services These barriers stem from
      both industry barriers and government regulation. Cable operators in China,
      such
      as our recently acquired Jinan Broadband businesses, are facing many challenges
      during the process of its evolution from single-system operators to
      multiple-system operators. The rates we charge and services we provide to cable
      customers are subject to government regulation and approval.





***Industry
      Barrier***





The
      radio
      and television broadcasting industries are highly regulated in China. Local
      broadcasters including national, provincial and municipal radio and television
      broadcasters are 100% state-owned assets. SARFT regulates the radio and
      television broadcasting industry. In China, the radio and television
      broadcasting industries are designed to serve the needs of government
      programming first, and to make profits next. The SARFT interest group controls
      broadcasting assets and broadcasting contents in China.





MII
      (Ministry of Information Industry) on the other hand, regulates the telecom
      industry. As China’s telecom industry is much more deregulated than the
      broadcasting industry, MII has been always pushing the bottom line of content
      control of SARFT by trying to launch more telecom value-added services with
      content offering in nature, such as IPTV, broadband TV, etc. While China’s
      telecom industry has substantial financial backing, SARFT, and its regulator,
      the Propaganda Ministry under China’s Communist Party Central Committee, never
      relinquished ultimate regulatory control over content and broadcasting control.





The
      major
      internet regulatory barrier for cable operators to migrate into multiple-system
      operators and to be able to offer telecom services is the license barrier.
      Very
      few independent cable operators in China acquired full and proper broadband
      connection licenses from MII. The licenses, while awarded by MII, are given
      on
      very-fragmented regional market levels. With cable operators holding the last
      mile to access end users, SARFT cable operators pose a competitive threat to
      local telecom carriers. While internet connection licenses are deregulated
      to
      even the local private sector, MII still tries to utilize the license barrier
      to
      fence off threats from cable operators that fall under the SARFT interest group.





Our
      business is highly regulated and we are required to obtain government approval
      from the Ministry of Commerce of the People’s Republic of China, commonly
      referred to as MOFCOM, and other government agencies in China that approve
      transactions such as our acquisition of Jinan Broadband. Additionally, foreign
      ownership of certain businesses and assets in China is not permitted without
      specific government approval. For this reason, we acquired only 51% Jinan
      Broadband with the remaining 49% owned by the selling agency and revenue sharing
      and voting control is governed among the parties based on written agreements
      such as our Exercise Service Agreement and the Cooperating Agreement.





We
      do not
      have plans to provide value added services in the near future to our cable
      internet users and intend to expand by increasing the number of regions in
      which
      we are licensed to operate.




***Lack
      of Economies of Scale***




Up
      until
      2005, China had over 2,000 independent cable operators on different levels.
      While SARFT pushed hard from the national level to call for national
      consolidation of cable networks, the consolidation mostly occurs on a provincial
      platform. The 30 provinces are highly variable in their consolidation efforts
      and processes. For most cable operators in China, on a stand-alone basis, they
      still lack the economies of scale to systematically rollout value-added services
      that can significantly upgrade ARPU. (See SARFT website, above).





SARFT
      has
      taken various steps to implement a separation scheme to achieve economies of
      scale in the value-added service and cable operation sector. First, SARFT has
      been separating cable network assets from broadcasting assets and currently
      allows state-owned-enterprises to hold up to 49% in the cable network
      infrastructure assets. Second, SARFT is separating the value-added services
      segment from the network infrastructure which tends to increase private
      investments.




7




***Lack
      of Management Expertise***





Current
      monthly cable sales are low, with small profit margins if any. As a result,
      we
      believe that the cable operators lack management expertise and marketing
      expertise to promote and launch more sophisticated forms of value-added services
      like cable internet broadband service.





***Lack
      of Strategic Focus***





Due
      to
      its highly-regulated nature, we believe that the radio and broadcasting industry
      does not have the same financial resources as the deregulated telecom industry
      in China, and that the priorities and goals of this industry are different
      from
      the telecom industry.





We
      believe that SARFT and its broadcasters are currently focusing on increasing
      subscription revenues by converting average Chinese television viewers from
      “analog” customers into “digital” (pay TV) customers. The financial resources
      and strategic focus are put on the massive digitalization efforts and on the
      set-top-boxes to be given away free of charge within digital television service
      bundling in most regions. Due to the lack of financial resources, the rollout
      of
      cable broadband services and other value-added services is moved lower on the
      SARFT priority list.





The
      above
      elements highlight the current challenges faced by local cable operators to
      rollout cable TV value added services in China.





**Employees**





As
      of
      December 31, 2007, we had a total of 68 employees at Jinan Broadband, which
      include 20 in sales and marketing, 38 in technical staff and 10 in management,
      finance and administration. In addition, we have two full time employees in
      the
      United States.




**Recent
      Developments**





***Settlement
      Agreement and Convertible Note and Warrant Financing***


On
        January 11, 2008, the Company entered into a Settlement Agreement (the
“Settlement Agreement”) by and among the Company and its subsidiaries, Stephen
        P. Cherner, Maxim Financial Corporation, Mark L. Baum, BCGU, LLC, Mark I.
        Lev,
        Wellfleet Partners, Inc., Yue Pu, Clive Ng, Chardan Capital Markets, LLC
        (“Chardan Capital”), Jaguar Acquisition Corporation (“Jaguar”), and China
        Cablecom Holdings, Ltd (“Cablecom Holdings”).
 
 Simultaneously,
        we consummated a private 5% convertible note (the “Notes”) and warrant financing
        with gross proceeds of $4,850,000 (the “January 2008 Financing”), through
        Chardan Capital acting as Placement Agent and appointed three additional
        directors and a new Chief Executive Officer to the Company. The following
        is a
        summary only of the material terms of the Settlement Agreement, Employment
        Agreement Amendments and the
        January 2008 Financing related agreements (including the note purchase
        agreement, the form of Notes and form of warrants) which were filed as exhibits
        to our Current Report on Form 8-K dated January 11, 2008, the provisions
        of
        which are incorporated by reference herein.




*Settlement
      Agreement*


The
        Settlement Agreement was negotiated by the Company, its advisors and management
        and certain shareholders, for purposes of facilitating the Company’s business
        plan and expediting and facilitating the Company’s financing activities and
        resolving disputes between management and certain investors and consultants
        concerning possible claims that such investors suggested might be brought
        against Mr. Ng for his activities in forming Cablecom Holdings and its entry
        into a Proposed Merger (as defined below and, which has since been completed)
        with a subsidiary of Jaguar as violative of his employment agreement with
        the
        Company. The Settlement Agreement provides, subject to the terms thereof,
        for
        general mutual releases of all executives and management and their affiliated
        entities and also provides for the modification of employment agreements
        of both
        Mr. Clive Ng and Mr. Pu. The
        Settlement Agreement also calls for the transfer of certain securities by
        Mr. Ng
        to certain of the Company’s shareholders and consultants, as elaborated further
        herein in exchange for releases in favor of the Company and management and
        their
        affiliates, and to investors in the January 2008 Financing.


8


Among
      other provisions, pursuant to the Settlement Agreement:




·
            Clive
                  Ng, our Chairman, has agreed to transfer, not later than three
                  business
                  days after the closing of the proposed merger of a subsidiary of
                  Cablecom
                  Holdings, as successor to Jaguar in its proposed redomestication
                  merger
                  with and into China Cablecom, Ltd., a private limited liability
                  British
                  Virgin Islands company (“China Cablecom”) (the “Proposed Merger”), of
                  390,000 shares of common stock of Cablecom Holdings (the “Cablecom
                  Holdings Shares”), the resulting surviving parent entity after the
                  Proposed Merger. The 390,000 Cablecom Holdings Shares were to only
                  be
                  issued in the event of consummation of the Proposed Merger and
                  were to be
                  transferred by Mr. Ng on an “as is basis”, except that such shares have
                  the same lock-up restrictions, registration or other rights, privileges
                  or
                  benefits as Mr. Ng has for all other shares to be issued to him
                  by
                  Cablecom Holdings under the Proposed Merger terms. The 390,000
                  Cablecom
                  Holdings Shares will only be issued upon receipt of releases from
                  certain
                  parties listed in the Settlement Agreement. These shares are in
                  the
                  process of being transferred to
                  us;




·
            Clive
                Ng has agreed to (i) transfer an aggregate of 400,000 shares of the
                Company’s common stock owned by him, to an unaffiliated escrow agent on
                behalf of a consultant that was a party to the Settlement Agreement,
                in
                accordance with the terms of an escrow agreement which provides,
                among
                other things, that such shares will only be released from escrow
                in the
                event that releases are obtained from certain parties listed in the
                Settlement Agreement, and (ii) make a charitable gift of an aggregate
                of 28,444 shares of Common Stock to a charitable organization selected
                by
                Mr. Lev, upon receipt of releases from certain parties listed in
                the
                Settlement Agreement;




·
            Each
                  of Messrs. Ng and Pu, have agreed to modifications to their employment
                  agreements with the Company (the “*Employment
                  Agreement Amendments*”),
                  reducing their time commitments to the Company and its subsidiary
                  and
                  providing that once replacement executive officers have been hired
                  (and in
                  the case of Mr. Ng, assuming Mr. Pu continues in his role as chief
                  financial officer, eliminating his executive duties and he will
                  only
                  continue as the Chairman and a director of China Broadband and
                  the
                  Company), requiring in the case of Mr. Ng that he be subject to
                  an ongoing
                  obligation to offer acquisition candidates in the stand-alone,
                  independent
                  broadband business to China Broadband in the future (and recognizing
                  that
                  acquisition candidates involving acting as a joint venture provider
                  of
                  integrated cable television services in the People’s Republic of China and
                  related activities, but which does not include the provision of
                  Stand-Alone Broadband Services are the business of China Cablecom)
                  and
                  allowing them to continue to be involved with certain other activities
                  and
                  to continue in their executive capacities with Cablecom Holdings
                  or its
                  successor after the Proposed Merger. In addition, Mr. Ng has waived
                  his
                  right to receive all accrued salary previously owed to him and
                  to continue
                  accruing future salary until a financing
                  event;




·
            Mr.
                Ng has agreed to assign, and did assign 7,017,814 shares of our common
                stock owned beneficially by him to the investors (other then Chardan
                Capital which did not receive shares from Mr. Ng) in the private
                January
                2008 Financing as described below, thereby facilitating the January
                2008
                Financing while avoiding additional dilution to the Company’s existing
                stock and warrant holders;




·
            Mr.
                Ng has agreed to transfer to certain private investors who acquired
                shares
                directly from him in July of 2007, an aggregate of 566,790 shares
                of our
                common stock owned beneficially by him, in exchange for releases
                and
                representation letters to be executed by such
                persons;




·
            Chardan
                Capital, our placement agent in the private financing and a party
                to the
                Settlement Agreement, completed the January 2008 Financing concurrently
                upon execution by all related parties of the Settlement
                Agreement;




·
            Mr.
                David Zale, Mr. Jonas Grossman and Mr. James Cassano, an affiliate
                of
                Jaguar, were appointed as directors joining Messrs. Yue Pu and Clive
                Ng on
                the board.




·
            The
                  Company agreed to extend the expiration dates of 4,000,000 Investors
                  Warrants to purchase common stock at an exercise price of $2.00
                  per share,
                  issued in the Company’s private placement of common stock and warrants in
                  2007, from March of 2009, through January 11, 2013, upon receipt
                  of
                  releases from such Investor Warrant holders. In addition, the Company
                  has
                  offered to BCGU, LLC, WestPark Capital, Inc., Maxim Financial Corporation,
                  who were issued 500,000, 640,000 and 3,974,800 warrants exercisable
                  at
                  $.60 per share in January of 2007, the right, at their discretion,
                  to
                  extend the exercisability period of their respective warrants through
                  January 11, 2013 or, in the alternative, the right to receive a
                  scrip
                  right to execute the unexercised portion of their warrants, at
                  any time
                  between the time of expiration date of their unexercised warrants
                  and
                  continuing through January 11, 2013.


***Simultaneous
        Closing of $4,971,250 Convertible Note and Warrant Financing; Transfer of
        Shares
        by Ng***
 
 Simultaneously
        with the entry into the Settlement Agreement on January 11, 2008, and we
        entered
        into and consummated the January 2008 Financing by entering into a subscription
        agreement (the “Subscription Agreement”) with ten accredited investors
        (inclusive of Chardan Capital) with respect to the issuance of an aggregate
        of
        $4,971,250 principal amount of Notes due
        January 11, 2013, and Class
        A
        Warrants to
        purchase an aggregate of 6,628,333 shares of common stock of the Company
        at $.60
        per share expiring on June 11, 2013.




9




An
      aggregate of $4,971,250 principal amount of Notes was issued to ten investors
      including Chardan Capital which applied its entire 2.5% cash commission towards
      a subscription for Notes and Class A Warrants. Interest on the Notes compound
      monthly at the annual rate of five percent (5%) with the maturity date on
      January 11, 2013, if not sooner paid. Each holder of a Note can convert all
      or
      any portion of the then aggregate outstanding principal amount of the Note,
      together with interest, into shares of Common Stock at a conversion price of
      $0.75 per share, for or a total of 6,628,333 shares as of the date of issuance.
      The Notes are granted “full ratchet” anti dilution protection for the first
      three years, pursuant to which the conversion price of the Notes will be
      adjusted downward in the event of the issuance by the Company of common stock
      or
      rights to acquire common stock at prices below $.75 per share (or below such
      other conversion price of the Notes as is then in effect) to such lower price.
      Thereafter and until repaid, the Notes provide only for weighted average
      anti-dilution price protection adjustment. In addition, the Notes are subject
      to
      certain customary anti dilution protections for stock splits, combinations
      or
      similar transactions of the Company.





An
      aggregate of 6,628,333 Class A Warrants, exercisable at $0.60 per share and
      expiring on June 11, 2013 were issued pursuant to the Subscription Agreement
      as
      part of the January 2008 Financing. The Class A Warrants are exercisable (with
      cash or via cashless exercise) commencing one hundred and eighty-one (181)
      days
      after the closing date of the January 2008 Financing until 65 months thereafter,
      June 11, 2013. The Class A Warrants are subject to “full ratchet” anti-dilution
      protection for the first three years, pursuant to which the exercise price
      of
      the Class A Warrants will be adjusted downward in the event of the issuance
      by
      the Company of Common Stock or rights to acquire Common Stock at prices below
      $.60 per share (or below such other exercise price of the Class A Warrants
      as is
      then in effect) to such lower price. Thereafter and until all Class A Warrants
      are exercised or expire, the Class A Warrants provide only for weighted average
      anti-dilution price protection adjustment. In addition, the Class A Warrants
      are
      subject to certain customary anti-dilution protections for stock splits,
      combinations or similar transactions of the Company.


*Placement
        Agent Fee and Warrants to Chardan Capital Markets, LLC*
 
 In
        connection with their engagement as a placement agent, Chardan Capital has
        been
        compensated a $10,000 due diligence fee and reimbursement of legal and other
        expenses, and a cash placement agent fee of 2.5% based on the total amount
        sold
        to investors, or $121,250 based on $4,850,000 of principal amount of Notes
        issued to other investors. Chardan Capital has, pursuant to the terms of
        their
        engagement agreement, agreed to apply their cash compensation of $121,250
        into
        an investment in a $121,250 Note and 166,667 Class
        A
        Warrants at the
        same terms as all other investors in the offering. In addition, Chardan Capital
        was compensated warrants to acquire 1,131,667 shares of the Company’s Common
        Stock at an exercise price of $.50 per share exercisable commencing January
        11,
        2008 and expiring on June 11, 2013 (the “Broker Warrants”). The Broker Warrants
        are identical to the Class
        A
        Warrants in all
        other material respects.
 
 *Assignment
        By Clive Ng of Shares to Investors; Release of Lock-Up
        Agreements*
 
 To
        incentivize the investors in January 2008 Financing and facilitate such
        financing, and as contemplated under the terms of the Settlement Agreement,
        Mr.
        Clive Ng assigned an aggregate of 7,017,814 shares of our common stock
        beneficially owned by him to the January 2008 Financing investors, other
        than
        Chardan Capital, at a nominal purchase price of $.01 per share. **
 
 Prior
        to
        the transfers by Mr. Ng. the Company, 88 Holdings, Inc., China Broadband
        Partners, Ltd., BCGU, LLC, MVR Investments, LLC, Stephen P. Cherner and WestPark
        Capital, Inc. were each shareholder parties to a Lock-Up Agreement dated
        as of
        January 23, 2007 (the “Lock-Up Agreement”). The Lock-Up Agreement provided, that
        each such shareholder shall only be permitted to sell 5% of the shares
        originally issued to them as scheduled in the Lock-Up Agreement, during any
        30
        day period and, that the Company’s management may review the lock up provisions
        and increase the number of shares that may be sold provided that, among other
        conditions, such modification is made *pari
        pasu* among
        all
        shareholders to this Lock-Up Agreement based on their share ownership. As
        a
        condition subsequent to the January 2008 Financing requested by Chardan Capital,
        and to remove any contractual restrictions relating to the 7,017,084 shares
        of
        common stock assigned by Mr. Ng to the Note investors to facilitate the
        financing, the Company and each of the shareholder parties to the Lock-Up
        Agreement agreed to the termination of this Lock-Up Agreement for all parties
        effective as of January 13, 2008.
 
 *Board
        of Directors and Employment Agreement Amendments*
 
 Simultaneously
        with the closing of the January 2008 Financing and entry into the Settlement
        Agreement on January 11, 2008, Messrs. David Zale, James Cassano and Jonas
        Grossman were appointed as directors of the Company, joining Messrs. Clive
        Ng
        and Yue Pu. Prior to the appointment of Messrs. Zale, Cassano and Grossman,
        such
        persons had no affiliations or business relationship with the Company, except
        that Mr. Grossman was and continues to be, a partner and officer of Chardan
        Capital which received a placement agent fee of notes and warrants in connection
        with the January 2008 Financing as described above. The board also appointed
        Mr.
        Tom Lee as new Chief Executive Officer and Principal Executive Officer on
        January 11, 2008.




10





Additionally,
      Messrs. Yue Pu and Clive Ng have each entered into amendments to their
      employment agreements which delineate the scope of services required from each
      of them for the Company and its subsidiaries, and permits mutual director and
      executive affiliations with the Company and Cablecom Holdings. Mr. Ng’s
      Employment Agreement Amendment also calls for his work requirements to be
      appropriately reduced to a non-executive position, although he remains as
      Chairman and director. The Employment Agreement Amendments were approved by
      the
      board and by the disinterested board members, Messrs. Zale and Grossman and
      was
      required as part of the Settlement Agreement.





***Shandong
      Newspaper Acquisition***




On
      March
      7, 2008, through our WFOE in the PRC, we entered into a Cooperation Agreement
      (the "Shandong Newspaper Cooperation Agreement") by and among our indirect
      WFOE
      subsidiary, Shandong Broadcast & TV Weekly Press and Modern Movie & TV
      Biweekly Press, each PRC companies (collectively "Shandong Newspaper"). The
      Shandong Newspaper Cooperation Agreement provided for, among other terms, the
      creation of a joint venture entity in the PRC called Shandong Lushi Media Co.,
      Ltd. ("Shandong Media") that would own and operate Shandong Newspaper's
      television program guide, newspaper and magazine publishing business in the
      Shandong region of the PRC (the "Shandong Newspaper Business") which businesses
      were previously owned and operated by the Shandong Newspaper entities pursuant
      to exclusive licenses.




Under
      the
      terms of the Shandong Newspaper Cooperation Agreement and related transaction
      documents, the Shandong Newspaper entities mentioned above will contribute
      their
      entire Shandong Newspaper Business and transfer certain employees, to Shandong
      Media in exchange for a 50% stake in Shandong Media, with the other 50% of
      Shandong Media to be owned by our WFOE in the PRC. In exchange therefore, the
      Shandong Newspaper Cooperation Agreement provides for total initial
      consideration from us of approximately $1.5 million (approximately 10 million
      RMB based on exchange rates at the time) which shall be contributed to Shandong
      Media as working and acquisition capital, of which the Company has already
      paid
      approximately $300,000 (approximately 2 million RMB) in early March 2008 as
      a
      down payment.




In
      addition to the initial purchase price of $1.5 million (10 million RMB), the
      Shandong Newspaper Cooperation Agreement provides for additional consideration
      of approximately US $757,757 and US $3,000,000 (between 5 million RMB and 20
      million RMB, respectively, based on exchange rates at the time) to be paid
      as a
      capital contribution to Shandong Media in the event that certain performance
      thresholds are met during the first 12 months of operations after closing the
      transaction for a total maximum purchase price of approximately $4.06 (30
      million RMB based on exchange rates at the time).




In
      the
      event that audited annual net profits during the first year after closing of
      the
      transaction relating to the Shandong Newspaper Cooperation
      Agreement:




·
            equals
                or exceeds 16 million RMB, then we will be required to contribute
                an
                additional 20 million RMB (or, approximately $3,000,000 based on
                current
                exchange rates) to the Shandong Media joint venture;




·
            equals
                or exceeds 4 million RMB but less than 16 million RMB, then we will
                be
                required to contribute 125% of such net profits to the Shandong Media
                joint venture, and




·
            is
                less then 4 million RMB, then only an additional 5 million RMB
                (approximately US $757,575 based on current exchange rates).




***Description
      of Shandong Newspaper Business Being Acquired***




The
      Shandong Newspaper Business being acquired from Shandong Newspaper by our
      Shandong Media joint venture includes the distribution of periodicals, the
      publication of advertising, the organization of public relations events, the
      provision of information related services, copyright transactions, the
      production of audio and video products, the provision of audio value added
      communication services. The Shandong Newspaper Cooperation Agreement also
      provides that these businesses will be operated primarily by employees
      contracted to Shandong Media through secondment by the respective Shandong
      Newspaper entities.




In
      addition, the Shandong Newspaper entities are required, upon completion of
      all
      closing conditions, to enter into an Exclusive Advertising Agency Agreement
      and
      an Exclusive Consulting Services Agreement with Shandong Media which require
      that the Shandong Newspaper entities shall appoint Shandong Media as its
      exclusive advertising agent and provider of technical and management support
      for
      a fee.




The
      closing of the transaction is dependant upon, among other conditions, the
      obtaining of all necessary PRC government consents, payment of the initial
      purchase price set forth above, and entry into the Exclusive Advertising Agency
      Agreement and Exclusive Consulting Service Agreement.


In
        addition to being the exclusive provincial television programming guide
        publishing group in one of the PRC’s most populous provinces, and based on our
        initial (unaudited) due diligence Shandong Newspaper has:


·
            A
                combined subscription basis of over 200,000 subscribers;




11




·
            Three
                publishing assets clearly focused on different readership segments;


·
            Retail
                and subscription income accounts for more than 75% of total revenue,
                indicating great growth potential for advertising revenue; and


·
            Unique
                publishing titles and exclusive TV Guide copyrights;





The
      periodicals published by Shandong Newspaper are summarized below.





*Shandong
      Broadcast & TV Weekly (Newspaper)*





Established
      since 1954, Shandong Newspaper is the provincial TV programming guide &
general entertainment newspaper with what management believes is the longest
      operating history in the nation. Publishing on weekly basis, it has been
      maintaining 80,000 average copy in circulation per week. According to CTR (CCTV
      Research Co. Ltd)’s rating report, Shandong Broadcast & TV Weekly Newspaper
      enjoys on average half a million readership on weekly basis.





Target
      readership of Shandong Broadcast & TV Weekly mostly concentrates in
      middle-age to senior readers in Shandong region and is the most welcomed general
      entertainment newspaper among this segment of readership in Shandong.





*TV
      Weekly Magazine*





TV
      Weekly
      Magazine is a national PRC magazine title, ranked among China’s top 5 TV Guide
& general entertainment magazines. Publishing on weekly basis, this magazine
      reaches average circulation of 40,000 copies in Shandong region. Industry leader
      of Shanghai TV Weekly reaches 300,000 copies sales on weekly basis, setting
      a
      bar for regional TV Guide magazine for TV Weekly. The unique national publishing
      title encourages TV Weekly to expand it’s target market to neighboring regions
      in northern China.





*Mordern
      Movie Times Magazine (Bi-Weekly)*





Modern
      Movie Time magazine is published jointly by Shandong TV Drama and Movie
      Production Center and Shandong TV Station. Ranked among the top 100 magazine
      for
      5 consecutive years in China, it’s among the most popular fans magazine in north
      China region. Modern Movie Time magazine reaches 100,000 copies in circulation
      on bi-weekly basis in year 2007.




No
      assurance can be made that we will complete this acquisition or that our plan
      for an increase in revenues and in turning Shandong Newspaper profitable will
      be
      successful. Our plans and intentions are regularly subject to change, risks
      and
      other uncertainties as outlined herein and in our “Forward Looking Statements”
above and “Risk Factors” below.




12




**RISK
      FACTORS**





*Our
      business and financial condition is subject to numerous and substantial risks
      including, without limitation, risks relating to our forward looking statements.
      A description of theses forward looking statements is contained in the forepart
      of this Annual Report and incorporated by reference herein. These risks include
      those set forth below and elsewhere in this Annual Report. Readers are
      encouraged to review these risks carefully before making any investment
      decision.  Additional risks and uncertainties not presently foreseeable to
      us may also impair business operations.   If any of the following
      risks occur, our business, financial condition or operating results could be
      materially and adversely affected.  In such case, the trading price of our
      common stock could decline, and an investor could lose all or part of his
      investment. Most of the risks set forth below pertain to the business of our
      wholly owned subsidiary,China Broadband Cayman, and its operations in the PRC.*





**BUSINESS
      RELATED RISKS**





**We** ***are
      dependant on our ability to raise additional capital to complete our acquisition
      strategy.*** ****





We
      are
      dependent upon our ability to raise capital to complete our business plan,
      which
      involves, among other strategies, growth through acquisition. Specifically,
      and
      without limitation, we will need an additional approximate $3,000,000 to
      satisfy our second payment for our acquisition of Shandong Newspaper, presuming
      that its performance goals are satisfied, and we will need additional capital
      to
      acquire licenses in additional regions. Our ability to raise capital would
      be
      greatly hindered if we are not able to become and remain current with our
      reporting obligations. Remaining current will depend on our ability to prepare
      and consolidate our financial statements with our Chinese subsidiaries. If
      we do
      not raise capital, or if we are unable to become listed or remain listed on
      a
      United States trading exchange or quotation system, our business will be
      adversely affected.





***Our
      auditors have expressed substantial doubt in their report on our financial
      statements about our ability to continue as a going concern.***





Our
      auditors have included an explanatory paragraph in their report dated as of
      April 11, 2008 on our consolidated financial statements for the year ended
      December 31, 2007, indicating that there is substantial doubt regarding our
      ability to continue as a going concern. The financial statements included
      elsewhere in this current report do not include any adjustments to asset values
      or recorded liability amounts that might be necessary in the event we are unable
      to continue as a going concern. If we are in fact unable to continue as a going
      concern, you may lose your entire investment in our company. We will therefore
      need immediate additional substantial capital in order to continue to operate.





***We
      are currently in a growth-stage and may experience setbacks in business
      development and expansion.***





We
      are
      subject to all of the risks inherent in the creation of a new business. As
      a
      growth-stage company, our cash flows may be insufficient to meet expenses
      relating to our operations and the growth of our business, and may be
      insufficient to allow us to service new and additional contracts.





***We
      may have unknown liabilities that accrued prior to our merger.***


The
        Company was formerly known as Alpha Nutra, Inc., and has had to management’s
        knowledge, no significant operations since June 2005. Prior to such time,
        Alpha
        Nutra, Inc. was in the vitamins and nutritional supplements business. While
        we
        believe that no preexisting liabilities exist and obtained limited indemnities
        from certain members of former management, no assurances can be made that
        we do
        not have any liabilities existing from prior to our share exchange in January
        of
        2007, commitments or restrictions that could result in a financial loss to
        us
        from completing this transaction or its consolidated audited financial
        statements.





***No
      assurance can be made that we will be able to successfully operate Jinan
      Broadband and/or the broadband cable business.***





The
      Broadband cable business of Jinan Broadband is our only initial business. This
      company has only approximately 58,000 broadband cable internet users as of
      December 2007. Additionally, the broadband cable businesses of other agencies
      in
      China are relatively new with little or no reliable comparable statistical
      or
      historic financial information available. Under our current letters of intent
      to
      enter into new territories, we will be responsible for the initial installation
      and roll-out to customers. We therefore have limited experience or know-how
      with
      respect to operating a cable internet business in China and little information
      can be obtained. Therefore we cannot assume that we will be able to mange our
      business effectively.





13


***We
      do not own Jinan Parent or Jinan Center and if they or their ultimate
      shareholders or control persons violate our contractual arrangements with them,
      our business could be disrupted, our reputation may be harmed and we will have
      only limited rights and ability to enforce our rights against these parties.***





Our
      operations are currently dependent upon our contractual relationships with
      Jinan
      Center and Jinan Parent. The terms of these agreements are often statements
      of
      general intent and do not detail the rights and obligations of the parties.
      Some
      of these contracts provide that the parties will enter into further agreements
      on the details of the services to be provided. Others contain price and payment
      terms that are subject to monthly adjustment. These provisions may be subject
      to
      differing interpretations, particularly on the details of the services to be
      provided and on price and payment terms. It may be difficult for us to obtain
      remedies or damages from these companies or their ultimate shareholders for
      breaching our agreements. Because we rely significantly on these companies
      for
      our business, the realization of any of these risks may disrupt our operations
      or cause degradation in the quality and service provided by, or a temporary
      or
      permanent shutdown of, the company.  Our initial Exclusive Cooperation
      Agreement that enables us to own and operate our Jinan Broadband business,
      and
      the Exclusive Service Agreement in which the parties will cooperate and provide
      each other with technical services related to their respective broadband, cable
      and internet content-based businesses, is for a term of ten years and 20 years,
      respectively. If we are unable to renew these agreements on favorable terms,
      or
      to enter into similar agreements with other parties, our business may not
      expand, and our operating expenses may increase.





***Our
      future revenues depend on our ability to consistently bid and win new contracts
      and renew existing contracts and, therefore, our failure to effectively obtain
      future contracts could adversely affect our profitability.***





Our
      future revenues and overall results of operations require us to successfully
      bid
      on new contracts and renew existing contracts. Contract proposals and
      negotiations are complex and frequently involve a lengthy bidding and selection
      process, which is affected by a number of factors, such as market conditions,
      equipment availability and required governmental approvals. If negative market
      conditions arise or if the required governmental approval is not provided we
      may
      not be able to pursue particular projects, which could adversely affect our
      profitability.





***The
      success of our business is dependent on our ability to retain our existing
      key
      employees and to add and retain senior officers to our management.***





We
      depend
      on the services of our existing key employees, in particular, Marc Urbach,
      Clive
      Ng and Yue Pu. These persons may also pursue other business opportunities.
      Our
      success will largely depend on our ability to retain these key employees and
      to
      attract and retain qualified senior and middle level managers to our management
      team. We also do not have a full time internal Chief Financial Officer or
      financial controller for the consolidated companies. We have recruited
      executives and management in China to assist in our ability to manage the
      business and to recruit and oversee employees. While we believe we offer
      compensation packages that are consistent with market practice, we cannot be
      certain that we will be able to hire and retain sufficient personnel to support
      our cable broadband business. The loss of any of our key employees would
      significantly harm our business. We do not maintain key person life insurance
      on
      any of our employees.





***Our
      officers and directors may allocate their time to other businesses, and are
      or
      may be affiliated with entities that may cause conflicts of interest. In
      particular, our principal shareholder and Chairman is subject to potentially
      conflicting duties to another company he established to pursue business
      opportunities in the PRC.***


Messrs.
        Ng and Pu and certain of our other officers and directors (including Mr.
        Cassano, a director) have the ability to allocate their time to other businesses
        and activities, thereby causing possible conflicts of interest in their
        determination as to how much time to devote to the affairs of China Broadband.
        The have also recently entered into a settlement agreement with us and revised
        their employment agreements limiting their obligations.





These
      individuals are engaged in several other business endeavors and will continue
      to
      be so involved from time to time, and are not obligated to devote any specific
      number of hours to our affairs. If other business affairs require them to devote
      more substantial amounts of time to such affairs, it could limit their ability
      to devote time to our affairs and could have a negative impact on our ongoing
      business. Certain of our officers and directors are now, and all of them may
      in
      the future become, affiliated with entities engaged in business activities
      similar to those intended to be conducted by us or otherwise, and accordingly,
      may have conflicts of interest in allocating their time and determining to
      which
      entity a particular investment or business opportunity should be presented.
      Moreover, in light of our officers’ and directors’ existing affiliations with
      other entities, they may have fiduciary obligations to present potential
      investment and business opportunities to those entities in addition to
      presenting them to us, which could cause additional conflicts of interest.
      While
      we do not believe that any of our officers or directors has a conflict of
      interest in terms of presenting to entities other than our investment and
      business opportunities that may be suitable for it, conflicts of interest may
      arise in the future in determining to which entity a particular business
      opportunity should be presented.




14


We
        can
        not assure you that any conflicts will be resolved in our favor. These possible
        conflicts may inhibit the activities of such officers and directors in seeking
        acquisition candidates to expand the geographic reach of the Company or broaden
        its service offerings. For a complete description of our management’s other
        affiliations, see “Directors, Executive Officers, Promoters, Control Persons And
        Corporate Governance; Compliance With Section 16(a) Of The Exchange Act.” In any
        event, it cannot be predicted with any degree of certainty as to whether
        or not
        Mr. Ng, Mr. Pu or our other officers or directors will have a conflict of
        interest with respect to a particular transaction as such determination would
        be
        dependent upon the specific facts and circumstances surrounding such transaction
        at the time.


Mr.
      Ng,
      our Chairman, has recently entered into a settlement agreement with us and
      China
      Cablecom, Ltd., another company he organized to pursue cable opportunities
      in
      the PRC, and certain of its affiliated entities, to avoid possible claims that
      might be brought by us against him for activities in forming China Cablecom.
      If
      the parties to the settlement agreement fail to observe the terms of the
      agreement, we may be involved in burdensome and time-consuming litigation.





In
      particular, notwithstanding the terms of the settlement and the amendment to
      Mr.
      Ng’s employment agreement with China Broadband, Ltd., Mr. Ng’s continuing
      relationship with China Cablecom could lead to future claims of violation of
      his
      duties in the event future acquisitions in the PRC are offered to China Cablecom
      rather than to us, notwithstanding the express terms of the revised employment
      agreement and provisions of the settlement agreement. Accordingly, Mr. Ng’s
      revised employment agreement with us contains an express provision permitting
      Mr. Ng to resign from all positions with the Company in the event an acquisition
      arises that involves the business of China Broadband, which is how Mr. Ng
      currently intends to handle opportunities in the future that could create a
      situation similar to that which led to the settlement agreement.


The
        settlement agreement contains a provision recognizing that the provision
        of
        integrated cable television services in the People’s Republic of China and
        related activities of China Cablecom do not conflict with our business and
        that
        provision of stand-alone independent broadband services is the business of
        China
        Broadband should not conflict with theirs. However, notwithstanding the terms
        of
        the settlement agreement and the amendment to Mr. Ng’s employment agreement with
        us, Mr. Ng’s or Mr.
        Pu ’s
        continuing relationship with China Cablecom could lead to future claims of
        violation of his duties either entity in the event future acquisitions in
        the
        PRC are offered to us rather than to China Cablecom, notwithstanding his
        current
        intention to resign in such circumstances.
 
 Additional
        information relating to the settlement agreements and Employment
        Agreement Amendments can be
        found near the “Settlement Agreement” subsection of the “Recent Developments”
section above.




***If
      shareholders sought to sue our officers or directors, it may be difficult to
      obtain jurisdiction over the parties and access to the assets located in the
      PRC.***





It
      may be
      difficult, if not impossible, to acquire jurisdiction over officers and
      directors residing outside of the United States in the event a lawsuit is
      initiated against such officers and directors by shareholders in the United
      States. It also is unclear if extradition treaties now in effect between the
      United States and the PRC would permit effective enforcement of criminal
      penalties of the federal securities laws. Furthermore, because substantially
      all
      of China Broadband’s assets are located in the PRC, it would also be extremely
      difficult to access those assets to satisfy an award entered against us in
      United States court. Moreover, the Company is not aware of any treaties between
      the PRC and the United States providing for the reciprocal recognition and
      enforcement of judgments of courts. As a result, it may not be possible for
      investors in the U.S. to enforce their legal rights, to effect service of
      process upon our directors or officers or to enforce judgments of U.S. courts
      predicated upon civil liabilities and criminal penalties of our directors and
      officers under Federal securities laws.





***The
      Chinese government could change its policies toward, or even nationalize,
      private enterprise, which could reduce or eliminate the interests held in China
      Broadband.***




Over
      the
      past several years, the Chinese government has pursued economic reform policies,
      including the encouragement of private economic activities and decentralization
      of economic regulation. The Chinese government may not continue to pursue these
      policies or may significantly alter them to our detriment from time to time
      without notice. Changes in policies by the Chinese government that result in
      a
      change of laws, regulations, their interpretation, or the imposition of high
      levels of taxation, restrictions on currency conversion or imports and sources
      of supply could materially and adversely affect our business and operating
      results. The nationalization or other expropriation of private enterprises
      by
      the Chinese government could result in the total loss of our investment in
      China.




***Failure
      to achieve and maintain effective internal controls could have a material
      adverse effect on the trading price of our common stock and could prevent us
      from being listed in the OTC Bulletin Board or any other exchange or cause
      our
      delisting.***




We
      are
      subject to the reporting obligations of the United States securities laws.
      The
      Securities and Exchange Commission, as required by the Sarbanes-Oxley Act of
      2002, has adopted rules requiring public companies to include a report of
      management on such companies’ internal control over financial reporting in its
      annual report that contains an assessment by management of the effectiveness
      of
      such company’s internal control over financial reporting. In addition, an
      independent registered public accounting firm for a public company must attest
      to and report on management’s assessment of the effectiveness of the company’s
      internal control over financial reporting.




15


Management
      may not conclude that our internal control over our financial reporting is
      effective. Because of the complex and changing and regulatory enforcement and
      licensing rules in China, and because of our revenues sharing arrangements,
      it
      is possible our internal control will be lacking. If we fail to achieve and
      maintain the adequacy of our internal controls, we may not be able to ensure
      that we can conclude on an ongoing basis that we have effective internal
      controls over financial reporting in accordance with the Sarbanes-Oxley Act.
      As
      a result, any failure to achieve and maintain effective internal controls over
      financial reporting could result in the loss of investor confidence in the
      reliability of our financial statements, could negatively impact the trading
      price of our common stock or cause the delisting of our shares from any trading
      market in which they are on.




**Risks
      Related to Doing Business in China**





***The
      Chinese government may nationalize certain businesses or otherwise alter its
      policy with respect to foreign investment in China in a way that would prohibit
      or greatly hinder our ability to do business in China.***





While
      the
      Chinese government currently advocates foreign investment into China,
      socio-political changes, war or economic changes and shifts could result in
      a
      change in China’s policy with respect to investment from non-Chinese businesses.
      The government agencies, for example, could prohibit ownership of businesses
      by
      foreigners or revoke licenses granted that we are dependant on, or otherwise
      alter our revenue sharing model. While we do not believe that the foregoing
      is
      likely in the near future, no assurance can be made that such events, all of
      which would adversely affect us, will not occur.





***Since
      our assets and operating subsidiaries are located in the PRC, any dividends
      or
      proceeds from liquidation are subject to the approval of the relevant PRC
      government agencies. We are not likely to declare dividends in the near
      future.***





We
      are
      dependent on dividends and other distributions from our subsidiaries in order
      to
      recognize revenues. Because
      our assets are predominantly located inside the PRC, we will be subject to
      the
      law of the PRC in determining dividends. Under the laws governing foreign
      invested enterprises in the PRC, dividend distribution and liquidation are
      allowed but subject to special procedures under the relevant laws and rules. Under
      current Chinese tax regulations, dividends paid to us are not subject to Chinese
      income tax, but tax authorities in China may require us to amend our contractual
      arrangements with the WFOE or Jinan Broadband and their respective shareholders
      or affiliates, and to enter into different arrangements with other agencies
      in a
      manner that would materially and adversely affect the ability of our
      subsidiaries to pay dividends and other distributions to us or that would
      prohibit us from forfeiting revenues or consolidating our financial statements
      in order to comply with SEC reporting obligations.





In
      addition, Chinese legal restrictions permit payment of dividends only out of
      net
      income as determined in accordance with Chinese accounting standards and
      regulations. If we or our subsidiaries incur debt on their own behalf in the
      future, the instruments governing the debt may restrict their ability to pay
      dividends or make other distributions to us, which in turn would limit our
      ability to pay dividends on our common stock.





***The
      uncertain legal environment in China could limit the legal protections available
      to us.***





The
      Chinese legal system is a civil law system based on written statutes. Unlike
      common law systems, it is a system in which decided legal cases have little
      precedent value. In the late 1970s, the Chinese government began to promulgate
      a
      comprehensive system of laws and regulations governing economic matters. The
      overall effect of legislation enacted over the past 20 years has significantly
      enhanced the protections afforded to foreign invested enterprises in China.
      However, these laws, regulations and legal requirements are relatively recent
      and are evolving rapidly, and their interpretation and enforcement involve
      uncertainties. These uncertainties could limit the legal protections available
      to foreign investors such as us.





***Fluctuation
      in Renminbi exchange rates could adversely affect the value of our stock and
      any
      cash dividend declared on them.***





As
      our
      operations are primarily in China, any significant revaluation of the Chinese
      RMB may materially and adversely affect cash flows, revenues and financial
      condition.  For example, to the extent that we need to convert United
      States dollars into Chinese RMB for operations, appreciation of this currency
      against the United States dollar could have a material adverse effect on our
      business, financial condition and results of operations.  Conversely, if we
      decide to convert Chinese RMB into United States dollars for other business
      purposes and the United States dollar appreciates against this currency, the
      United States dollar equivalent of the Chinese RMB that we convert would be
      reduced.





Our
      ability to bid for and acquire businesses in new regions is dependent on
      favorable exchange rates between the U.S. dollar and the Chinese Renminbi.
      The
      value of the Renminbi may fluctuate according to a number of factors. Since
      1994, the exchange rate for RMB against the United States dollars has remained
      relatively stable, most of the time in the region of approximately RMB8.00
      to
      US$1.00. However, in 2005, the Chinese government announced that would begin
      pegging the exchange rate of the Chinese RMB against a number of currencies,
      rather than just the U.S. dollar.  Currently, exchange rates are
      approximately RMB 7.006 to US$1.00 resulting in the increase in price of Chinese
      products to U.S purchasers and increase in our business acquisition costs.
      O n
      July 21, 2005, as a result of the Renminbi rates being tied to a basket of
      currencies, the Renminbi was revalued and appreciated against the U.S. dollar.
      Additionally, global events and expenditures that deflate the value of the
      U.S.
      dollar will result in more expensive purchase prices of China based entities.
      There can be no assurance that such exchange rate will continue to remain stable
      in the future. Our revenues are primarily denominated in Renminbi, and any
      fluctuation in the exchange rate of Renminbi may affect the value of, and
      dividends, if any, payable on, our shares in foreign currency terms.




16




**Restrictions** ***on
      currency exchange may limit our ability to receive and use our revenues
      effectively.*** ****





Because
      almost all of our future revenues may be in the form of Renminbi, any future
      restrictions on currency exchanges may limit our ability to use revenue
      generated in Renminbi to fund our business activities outside China or to make
      dividend payments in U.S. dollars. Although the Chinese government introduced
      regulations in 1996 to allow greater convertibility of the Renminbi for current
      account transactions, significant restrictions still remain. Current account
      transactions include payments of dividends and trade and service-related foreign
      exchange transactions.





In
      contrast, capital account transactions, which include foreign direct investment
      and loans, must be approved by the State Administration for Foreign Exchange,
      or
      SAFE. We cannot be certain that the Chinese regulatory authorities will not
      impose more stringent restrictions on the convertibility of the Renminbi,
      especially with respect to foreign exchange transactions.





**Risks
      Related to the Telecommunications and Internet**


**Industries
      in the People’s Republic of China**


***Increased
        government regulation of the telecommunications and Internet industries in
        China
        may result in the Chinese government requiring us to obtain additional licenses
        or other governmental approvals to conduct our business which, if unattainable,
        may restrict our operations.***
 
 The
        telecommunications industry, including Internet content
        providers, or ICP, is highly regulated by the Chinese government, the main
        relevant government authority being the Ministry of Information Industry,
        or
        MII. Prior to China’s entry into the World Trade Organization (the “WTO”), the
        Chinese government generally prohibited foreign investors from taking any
        equity
        ownership in or operating any telecommunications business. ICP services are
        classified as telecommunications value-added services and therefore fell
        within
        the scope of this prohibition. This prohibition was partially lifted following
        China’s entry into the WTO allowing foreign investors to own interests in
        Chinese businesses. In addition, foreign and foreign invested enterprises
        are
        currently not able to apply for the required licenses for operating cable
        broadband services in China.
 
 We
        cannot
        be certain that we will be granted any of the appropriate licenses, permits
        or
        clearance that we may need in the future. Moreover, we cannot be certain
        that
        any local or national ICP or telecommunications license requirements will
        not
        conflict with one another or that any given license will be deemed sufficient
        by
        the relevant governmental authorities for the provision of our services.
 
 We
        rely
        exclusively on contractual arrangements with Jinan Parent and its approvals
        to
        operate as internet content
        providers. We believe that our present operations are structured to comply
        with
        Chinese law. However, many Chinese regulations are subject to extensive
        interpretive powers of governmental agencies and commissions. We cannot be
        certain that the Chinese government will not take action to prohibit or restrict
        our business activities. We are uncertain as to whether the Chinese government
        will reclassify our business as a media or retail company, due to our acceptance
        of fees for Internet advertising, online games and wireless value-added and other services as
        sources
        of revenues, or as a result of our current corporate structure. Such
        reclassification could subject us to penalties or fines or significant
        restrictions on our business. Future changes in Chinese government policies
        affecting the provision of information services, including the provision
        of
        online services, Internet access,
        e-commerce services and online advertising, may impose additional regulatory
        requirements on us or our service providers or otherwise harm our business.




***We
      may be unable to compete successfully against new entrants and established
      industry competitors.***




The
      Chinese market for Internet content and services is intensely competitive and
      rapidly changing. Barriers to entry are relatively minimal, and current and
      new
      competitors can launch new websites at a relatively low cost. Many companies
      offer competitive products or services including Chinese language-based Web
      search, retrieval and navigation services, wireless value-added services, online
      games and extensive Chinese language content, informational and community
      features and e-mail. In addition, as a consequence of China joining the World
      Trade Organization, the Chinese government has partially lifted restrictions
      on
      foreign-invested enterprises so that foreign investors may hold in the aggregate
      up to approximately 51% of the total equity ownership in any value-added
      telecommunications business, including an Internet business, in China.




17




Currently,
      our competition comes from standard “telephone” internet providers. Any of our
      present or future competitors may offer products and services that provide
      significant performance, price, creativity or other advantages over those
      offered by us and, therefore, achieve greater market acceptance than ours.





Because
      many of our existing competitors, as well as a number of potential competitors,
      have longer operating histories in the Internet market, greater name and brand
      recognition, better connections with the Chinese government, larger customer
      bases and databases and significantly greater financial, technical and marketing
      resources than we have, we cannot assure you that we will be able to compete
      successfully against our current or future competitors. Any increased
      competition could reduce page views, make it difficult for us to attract and
      retain users, reduce or eliminate our market share, lower our profit margins
      and
      reduce our revenues.





***Unexpected
      network interruption caused by system failures may reduce user base and harm
      our
      reputation.***





Both
      the
      continual and foremost accessibility of internet service websites and the
      performance and reliability of our technical infrastructure are critical to
      our
      reputation and the ability of our internet services to attract and retain users
      and advertisers. Any system failure or performance inadequacy that causes
      interruptions or delays in the availability of our services or increases the
      response time of our services could reduce user satisfaction and traffic, which
      would reduce the internet service appeal to users of “high speed” internet
      usage. As the number of users and traffic increase, we cannot assure you that
      we
      will be able to scale our systems proportionately. In addition, any system
      failures and electrical outages could materially and adversely impact our
      business.





***Computer
      viruses may cause delays or interruptions on our systems and may reduce our
      customer base and harm our reputation.***





Computer
      viruses may cause delays or other service interruptions on our systems. In
      addition, the inadvertent transmission of computer viruses could expose us
      to a
      material risk of loss or litigation and possible liability. We may be required
      to expend significant capital and other resources to protect our internet
      service against the threat of such computer viruses and to alleviate any
      problems. Moreover, if a computer virus affecting our system is highly
      publicized, our reputation could be materially damaged and customers may cancel
      our service.





***If
      our providers of bandwidth and server custody service fail to provide these
      services, our business could be materially curtailed.***





We
      rely
      on affiliates of Jinan Parent to provide us with bandwidth and server custody
      service for Internet users. If Jinan Parent or their affiliates fail to provide
      such services or raise prices for their services, we may not be able to find
      a
      reliable and cost-effective substitute provider on a timely basis or at all.
      If
      this happens, our business could be materially curtailed.





**Risks
      Relating to Our Securities**





***There
      are substantial risks of lack of liquidity and volatility
      risks.***




Our
      common stock is quoted in the OTC Bulletin Board market system under the symbol
      “CBBD” and is very thinly traded. The liquidity of our common stock is very
      affected by its limited trading market. The OTC Bulletin Board market is an
      inter-dealer market much less regulated than the major exchanges, and is subject
      to abuses and volatilities and shorting. There is currently no broadly followed
      and established trading market for our common stock. An established trading
      market may never develop or be maintained. Active trading markets generally
      result in lower price volatility and more efficient execution of buy and sell
      orders.  Absence of an active trading market reduces the liquidity of the
      shares traded there.




The
      trading volume of our common stock may be limited and sporadic.  As a
      result of such trading activity, the quoted price for our common stock on the
      OTC Bulletin Board may not necessarily be a reliable indicator of its fair
      market value.  In addition, if our shares of common stock cease to be
      quoted, holders would find it more difficult to dispose of, or to obtain
      accurate quotations as to the market value of, our common stock and as a result,
      the market value of our common stock likely would decline.





***Many
      of our securities will become freely tradable within the next several
      months.***





In
      accordance with the terms of the settlement agreement and subsequent note and
      warrant financing, our principal, Clive Ng, transferred 7,017,814 shares which
      will, after 90 days, no longer be deemed affiliate shares and may be subject
      to
      the newer “relaxed” Rule 144 restricted period provisions. In addition,
      investors in our private equity offering between January and May of 2007 are
      also able to sell up to 8,000,000 shares of common stock subject to certain
      “leak out” provisions and any lock-up relating to shares held by the four
      Broadband shareholders and Mr. Baum, our former executive, has been removed.
      There is no limit on the amount of restricted securities that may be sold (other
      then contractual limits, if any) by a non-affiliate after the restricted
      securities have been held by the owner for a period of one year more. A sale
      under Rule 144 or under any other exemption from the Securities Act, if
      available, or pursuant to subsequent registrations of our shares, may have
      a
      depressive effect upon the price of our shares in any active market that may
      develop.




18





**Our
      company is controlled by one of our principals that holds a majority of our
      common stock** ***.***





One
      of
      our shareholders, Clive Ng indirectly beneficially own over 51% of our common
      stock. As a practical matter, Mr. Ng will have control of the Company and all
      of
      our subsidiaries and will be able to assert significant influence over the
      election of directors and other matters presented for a vote of stockholders.
      Other shareholder will not have a voice in management decisions and will
      exercise very little control.




***Our
      board of directors may issue blank check preferred stock with rights and
      privileges greater than those of the Shares.***


Our
        articles of incorporation authorize the issuance of shares of “blank check”
preferred stock, the rights, preferences, designations and limitations of
        which
        may be set by the board of directors. While no preferred stock is currently
        outstanding or subject to be issued, the articles of incorporation have
        authorized issuance of up to 5,000,000 shares of preferred stock in the
        discretion of the board of directors. Such preferred stock may be issued
        upon
        filing of amended Articles of Incorporation and the payment of required fees;
        no
        further shareholder action is required. If issued, the rights, preferences,
        designations and limitations of such preferred stock would be set by the
        board
        of directors and could operate to the disadvantage of the outstanding common
        stock. Such terms could include, among others, preferences as to dividends
        and
        distributions on liquidation.




***There
      is no established public trading market for our securities and one may never
      develop. This could adversely affect the ability of investors in our Company
      to
      sell their securities in the public market*** **.**




We
      are
      currently listed on the OTC Bulletin Board market system. We cannot predict
      the
      extent to which a trading market will develop or how liquid that market might
      become. Accordingly, holders of our common stock may be required to retain
      their
      shares for an indefinite period of time.





The
      OTCBB
      is an inter-dealer, over-the-counter market that provides significantly less
      liquidity than stock exchanges. Quotes for stocks included on the OTCBB are
      not
      listed in the financial sections of newspapers, as are those for the exchanges.
      Therefore, prices for securities traded solely on the OTCBB may be difficult
      to
      obtain and holders of common stock may be unable to resell their securities
      at
      or near their original acquisition price or at any price. Market prices for
      our
      common stock will be influenced by a number of factors, including:




·
            the
                issuance of new equity securities pursuant to future
                offering;


·
            changes
                in interest rates;


·
            new
                services or significant contracts and
                acquisitions;


·
            variations
                in quarterly operating results;


·
            change
                in financial estimates by securities
                analysts;


·
            the
                depth and liquidity of the market for our common
                stock;


·
            investor
                perceptions of us and of China-based investments and companies generally;
                and


·
            general
                economic and other national and international
                conditions.





***Our
      common stock is considered a "penny stock" and may be difficult to sell.***





Our
      common stock is currently quoted on the OTC Bulletin Board, and trades below
      $5.00 per share; therefore, our common stock is considered to be a “penny stock”
and, as such, the market for our common stock may be further limited by certain
      SEC rules applicable to penny stocks. To the extent the price of our common
      stock remains below $5.00 per share or we have net tangible assets of $2,000,000
      or less, our common shares will be subject to certain “penny stock” rules
      promulgated by the SEC. Those rules impose certain sales practice requirements
      on brokers who sell penny stock to persons other than established customers
      and
      accredited investors. For transactions covered by the penny stock rules, the
      broker must make a special suitability determination for the purchaser and
      receive the purchaser’s written consent to the transaction prior to the sale.
      Furthermore, the penny stock rules generally require, among other things, that
      brokers engaged in secondary trading of penny stocks provide customers with
      written disclosure documents, monthly statements of the market value of penny
      stocks, disclosure of the bid and asked prices, disclosure of the compensation
      to the brokerage firm and disclosure of the sales person working for the
      brokerage firm. These rules and regulations adversely affect the ability of
      brokers to sell our common shares and limit the liquidity of our securities.




19




***We
      do not intend to pay dividends in the near future, if at all .***





We
      do not
      intend to pay any dividends and we do not foresee making any cash distributions
      in the manner of a dividend or otherwise. If we do want to liquidate or pay
      dividends, such liquidation or payment is subject to PRC law. Our board of
      directors presently intends to follow a policy of retaining earnings, if any.




20




**Item
      2. Description of Property.**





Through
      January 23, 2007, we shared office space with Business Consulting Group
      Unlimited, Inc. at 2038 Corte Del Nogal, Suite 110, Carlsbad, California 92011,
      an entity owned or controlled by our former principal shareholder, Mark L.
      Baum,
      Esq. Since the completion of the Share Exchange on January 23, 2007, our
      principal executive offices in the United States has been and continue to be
      located at 1900 Ninth Street, 3rd Floor Boulder, Colorado 80302, under a lease
      with Maxim Financial Corporation, a consultant to the Company. This space was
      occupied previously by China Broadband Cayman, since its inception in mid 2006.
      This lease is for 1,000 square feet of office space and shared administrative
      services. The monthly lease rate is $2,000 per month. This lease may be
      terminated for any reason by Maxim Financial Corporation on 30 days notice.
      Pursuant to our consulting agreement with it, Maxim Financial Corporation has
      waived its past fees owed by China Broadband Cayman since July of 2006 and
      all
      future rental fees of the Company through December 31, 2007. In addition, Maxim
      Financial Corporation has agreed to defer all monthly rental payments beginning
      January 2008 until the Company’s next capital raise subsequent to January 2008.





The
      principal address of our operating business of Jinan Broadband is c/o Jinan
      Guangdian Jiahe Digital TV Co. Ltd., No. 32, Jing Shi Yi Road, Jinan Shandong
      250014, Tel: (86531)-85652255 87077886 Fax: (86531)-82953142. The Company pays
      approximately $55,000 (400,000 RMB) annually for rent at its facilities in
      Jinan, renewable on an annual basis.


****


**Item
      3. Legal Proceedings.**





The
      Company is not a party to any legal proceedings.





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





No
      matters were submitted to a vote of security holders during the fourth quarter
      of the year ended December 31, 2007.





21


**PART
      II**





**Item
      5. Market for Common Equity and Related Stockholder Matters and Small Business
      Issuer Purchases of Equity Securities.**





Effective
        as of October 16, 2007, the symbol for our common stock was changed from
“APNA”
to “CBBD” to reflect our name change to China Broadband, Inc. Up until December
        20, 2008, we were trading on the Pink Sheets and the letters “.PK” were added to
        the end of our four letter identifier. Beginning December 21, 2008 we began
        trading on the OTC Bulletin Board and the letters “.OB” (CBBD.OB) are added to
        the end of our four letter identifier. Trading in the common stock has been
        limited and sporadic due to the limited market following and limited number
        of
        free trading shares, and the quotations set forth below are not necessarily
        indicative of actual market conditions. Further, these prices reflect
        inter-dealer prices without retail mark-up, mark-down, or commission, and
        may
        not necessarily reflect actual transactions. As of March 24, 2008 the closing
        price for our common stock was $1.05. \


**Fiscal
                Years:****High**
            
            **Low****2007**December
                31, 2007
            
            $
            4.50
            
            $
            3.00September
                30, 2007
            
            $
            4.00
            
            $
            4.00June
                30, 2007
            
            $
            4.00
            
            $
            1.75March
                31, 2007
            
            $
            3.00
            
            $
            2.00**2006**December
                31, 2006
            
            $
            2.75
            
            $
            1.50September
                30, 2006
            
            $
            5.00
            
            $
            4.00June
                30, 2006
            
            $
            5.00
            
            $
            4.00March
                31, 2006
            
            $
            5.00
            
            $
            4.00





As
      of
      March 31, 2008 there were 318 record holders of our common stock and 50,255,599
      shares of common stock issued and outstanding. The transfer agent of our common
      stock is Transfer Online, Inc.





Our
      revenues and operating results may fluctuate significantly from quarter to
      quarter, which can lead to significant volatility in the price and volume of
      our
      stock. In addition, stock markets have experienced extreme price and volume
      volatility in recent years. This volatility has had a substantial effect on
      the
      market prices of securities of many smaller public companies for reasons
      unrelated or disproportionate to the operating performance of the specific
      companies. These broad market fluctuations may adversely affect the market
      price
      of our common stock.





In
      addition, we expect a substantial number of shares to become freely tradable
      under Rule 144 during 2008. Shares eligible for future sale could depress the
      price of our common stock, thus lowering the value of a buyer’s investment.
      Sales of substantial amounts of common stock, or the perception that such sales
      could occur, could adversely affect prevailing market prices for shares of
      our
      common stock.





**Dividends**





We
      have
      not declared or paid dividends to our stockholders during this or our two most
      recently completed fiscal years. We do not anticipate that we will pay dividends
      any time in the near future and anticipate reinvesting revenues, , in the
      operations of the Company and in additional acquisitions. In addition, in order
      for us to declare and pay dividends, we would be dependant on receiving payments
      from our operating subsidiaries in the PRC. As these are PRC companies, we
      would
      be required to obtain various levels of regulatory approval prior to paying
      such
      dividends.





22




**EQUITY
      COMPENSATION PLAN INFORMATION**





**(c)****Plan
                Category**
            
            **(a)****Number
                of securities to be issued upon exercise of outstanding options,
                warrants
                and rights**
            
            **(b)****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 (1)
            
            
            -0-
            
            
            n/a
            
            
            -0-Equity
                compensation plans not approved by security holders (2)
            
            
            -0-
            
            
            n/a
            
            
            -0-Total
            
            
            -0-
            
            
            n/a
            
            
            -0-





(1)
        We do not have any equity compensation plans approved by the security
      holders.





(2)
        We do not have any equity compensation plans not approved by the security
      holders as of December 31, 2007. However, Effective as of the March 13, 2008,
      the board of directors of the company approved the China Broadband, Inc. 2008
      Stock Incentive Plan (the “Plan”), pursuant to which options or other similar
      securities may be granted. Qualified or Non-qualified Options to purchase up
      to
      2,500,000 shares of the Company’s common stock may be issued under the Plan. The
      Plan may also be administered by an independent committee of the board of
      directors. Currently, only 100,000 options were issued under the Plan which
      were
      issued on March 13, 2008, of which 100,000 were granted to Mr. Urbach,
      exercisable at $.99 per share, vesting over four years as per his employment
      agreement.





23


**Item
      6. Management's Discussion and Analysis and Plan of
      Operation.**


The
        following discussion and analysis should be read in conjunction with our
        audited
        financial statements and related notes included in this report and the “Forward
        Looking Statements” and “Risk Factors” elsewhere in this report. The statements
        contained in this report that are not historic in nature, particularly those
        that utilize terminology such as “may,” “will,” “should,” “expects,”
“anticipates,” “estimates,” “believes,” or “plans” or comparable terminology are
        forward-looking statements based on current expectations and assumptions.
        These
        statements are based on current information available to
        management.




Factors
      that could cause actual results to differ from expectations include, but are
      not
      limited to, those set forth under the sections “Forward Looking Statements” in
      the forepart of this report and the “Risk Factors” above, all of which should be
      read together.




**Background**




The
      Company was organized in California in 1988 under the name “TJB Enterprises,
      Inc.” as a blind pool/blank check company formed for the purpose of seeking a
      merger with a private operating company. We operated various businesses and
      underwent various reorganizations and a bankruptcy from inception through
      October of 2004 when we were reorganized into a Nevada corporation. From July
      1,
      2005 we operated as a blank check company under the name Alpha Nutra, Inc.
      in
      search of a business acquisition. See “Corporate History” subsection of “Item 1.
      Description of Business.”




**Current
      Nature of Operations**





On
      January 23, 2007, pursuant to the Share Exchange Agreement (the “Share
      Exchange”), we acquired all of the shares of China Broadband Cayman from the
      four Broadband
      Shareholders in exchange for 37,865,506 shares (the “Exchange Shares”) of our
      common stock, resulting in such shareholders controlling the Company and assumed
      obligations of China Broadband Cayman under $325,000 principal amount of 7%
      Convertible Promissory Notes, which became convertible into 1,300,000 shares
      of
      our common stock and assumed other related obligations. All of these 7%
      Convertible Promissory Notes have been converted into our common stock effective
      as of February 28, 2007 and all interest has been paid through such date in
      cash.


The
        Share
        Exchange has been accounted for as a reverse acquisition of the Company (then
        known as “Alpha Nutra, Inc.), with no adjustment to the historical basis of the
        assets and liabilities of China Broadband Cayman, and the operations were
        consolidated as though the transactions occurred as of the beginning of the
        first accounting period presented in the accompanying consolidated financial
        statements.





At
      the
      time of the closing of the Share Exchange Agreement, China Broadband Cayman
      was
      a party to a Cooperation Agreement (the “Cooperation Agreement”) with Jian
      Guangdian Jiahe Digital Television Co., Ltd. (“Jinan Parent”) to acquire a 51%
      controlling interest in an operating broadband cable internet company based
      in
      the City of Jinan in the Shandong Region of China, sometimes referred to herein
      as “Jinan Broadband.” The Cooperation Agreement provided that the operating
      business’ operations and pre-tax revenues would be assigned to our Jinan
      Broadband subsidiary for 20 years, effectively providing for an acquisition
      of
      the business. The Cooperation Agreement required an initial payment to Jinan
      Parent for the closing of the acquisition of this entity in early 2007,
      resulting in our China based WFOE owning a controlling 51% interest in Jinan
      Broadband and entry into the Exclusive Cooperation Agreement and an Exclusive
      Service Agreement. We have paid an aggregate of $5,772,000 for this business,
      of
      which, our initial payment of $2,572,000 was paid from our net proceeds from
      the
      first closing of our private offering in January 2007 and our second payment
      of
      $3,200,000 was completed in March 2008.




We
      currently operate through China Broadband Cayman, our wholly-owned subsidiary,
      which in turn operates through our WFOE located in China. The WFOE owns a 51%
      interest in Jinan Broadband, an operating broadband cable internet company
      based
      in the City of Jinan in the Shandong Region of China, and has entered into
      an
      Exclusive Service Agreement with Jinan Parent that enables us to share revenues.
      Through our WFOE, we have also entered into an agreement to create a joint
      venture entity that will own the Shandong Newspaper Business. (See “Recent
      Developments” above and below.)




A
      complete description of the business of Jinan Broadband acquired by us in early
      2007, along with an organizational chart and description of the Share Exchange
      and related agreements, can be found in the “Item 1. Description of Business”
section of this Annual Report and is incorporated by reference herein.


**Simultaneous
        Closing of 2007 Stock and Warrant Financing**
 
 Simultaneously
        with the closing of our acquisition of China Broadband Cayman on January
        23,
        2007, and in order to fund our first payment for the acquisition of the
        broadband business in China, we conducted the first closing of our private
        offering pursuant to which we entered into subscription agreements with
        investors for the sale of 6,000,000 shares of common stock and 3,000,000
        Redeemable Common Stock Purchase Warrants, exercisable at $2.00 per share
        (the
“Investor Warrants”). During the six months ended December 31, 2007 we raised an
        additional $1,000,000 such that we raised the aggregate maximum of $4,000,000
        in
        this offering consisting of an aggregate of 8,000,000 shares and 4,000,000
        warrants to accredited investors.




24


We
      used
      $2,572,125 of the proceeds of this offering from the first closing to pay the
      first installment plus expenses of our acquisition of a 51% interest in the
      China based broadband cable internet business spun off by Jinan Parent. We
      granted the investors registration rights in connection with this offering
      and
      compensated WestPark Capital, Inc., our placement agent, with a placement agent
      fee consisting of $320,000 plus expenses, and issued to them 640,000 warrants
      to
      purchase common stock at $.60 per share, paid during the year ended December
      31,
      2007. In addition we paid approximately $100,000 in other professional expenses
      during such time period for this transaction.




**Strategy**




Our
      strategy is to grow our business organically as well as via acquisitions and/or
      partnerships in the PRC with companies that are in, or complimentary to, the
      broadband arena. We have spent significant amounts of money for professional
      services related to this strategy and are not profitable. During 2007 we spent
      approximately $628,000 for professional services related to the Share Exchange,
      the acquisition of Jinan Broadband and for public company expenses. We expect
      that we will continue to incur significant expenses for professional services
      as
      well as other costs during 2008 and may not be profitable as we continue to
      implement our strategy.


Our
        strategy also includes completion of our acquisition of Shandong Newspaper
        (which we believe is imminent) in a joint venture. Shandong Newspaper’s business
        includes three main magazines: Shandong Broadcast & TV Weekly (Newspaper),
        TV Weekly Magazine and Mordern Movie Times Magazine (Bi-Weekly). We intend
        to
        invest our acquisition cost in this Joint Venture to increase sales and
        advertising revenues of its periodicals in order to become profitable. No
        assurance can be made that we will complete this acquisition or, if completed,
        that our business plan will be successful. Additional information related
        to our
        business and strategy as to the business of Shandong Newspaper is included
        in
        the section of this Annual Report titled “Item 1. Description of Business”
above.


**Recent
      Developments**





***Settlement
      Agreement, Convertible Note and Warrant Financing, Shandong Newspaper Joint
      Venture***





On
      January 11, 2008, the Company entered into a Settlement Agreement (the
“Settlement Agreement”) by and among the Company and its subsidiaries, Stephen
      P. Cherner, Maxim Financial Corporation, Mark L. Baum, BCGU, LLC, Mark I Lev,
      Wellfleet Partners, Inc., Yue Pu, Clive Ng, Chardan Capital Markets, LLC
      (“Chardan Capital”), Jaguar Acquisition Corporation (“Jaguar”), and China
      Cablecom Holdings, Ltd (“Cablecom Holdings”). We also appointed additional
      directors at the time of entering into the settlement agreement and revised
      the
      terms of certain affiliates’ employment agreements.





Simultaneously,
      we consummated a private, 5% convertible note and warrant financing with gross
      proceeds of $4,850,000 (the “January 2008 Financing”), through Chardan Capital
      acting as Placement Agent and appointed three additional directors and a new
      Chief Executive Officer to the Company.





Additionally,
      we entered into an agreement to acquire, through a joint venture, a controlling
      interest in Shandong Newspaper, a PRC based television programming guide
      business.





***Settlement
      Agreement with Ceratin Officers and China Cablecom***


In
        connection with a potential dispute with our investors and with Cablecom
        Holdings, another company formed by the principal stockholder of the Company,
        Mr. Ng, on January 11, 2008, we entered into a settlement agreement relating
        to
        such matters with Jaguar and certain of our consultants and shareholders.
        In
        addition, we have been obtaining separate releases from various holders of
        our
        common stock. The Settlement Agreement was negotiated by us, our advisors
        and
        management and certain shareholders, for purposes of facilitating our business
        plan and expediting and facilitating our financing activities and resolving
        all
        disputes with management, perceived or otherwise, and certain investors and
        consultants concerning possible claims that such investors suggested might
        be
        brought against Mr. Ng or the Company for his activities in forming and
        providing services for Cablecom Holdings. The Settlement agreement provides,
        subject to the terms thereof, for general mutual releases of all executives
        and
        management and their affiliated entities and also provides for the modification
        of employment agreements of both Mr. Clive Ng and Mr. Pu.
        The
        Settlement Agreement also calls for the transfer of certain securities by
        Mr. Ng
        to the Company and to certain of the Company’s shareholders and consultants, as
        elaborated further herein in exchange for releases in favor of the Company
        and
        management and their affiliates.





Among
      other material provisions, pursuant to the Settlement Agreement the following
      agreements have been entered into:




·
            Clive
                Ng, our Chairman, has agreed to transfer, not later than three business
                days after the closing of the proposed merger of a subsidiary of
                Cablecom
                Holdings, as successor to Jaguar Acquisition Corporation, a Delaware
                corporation (“Jaguar”) in its proposed redomestication merger, with and
                into China Cablecom, Ltd., a private limited liability British Virgin
                Islands company (“China Cablecom”) (the “Proposed Merger”), of 390,000
                shares of common stock of Cablecom Holdings (the “Cablecom Holdings
                Shares”), the resulting surviving parent entity after the Proposed Merger.
                The 390,000 Cablecom Holdings Shares will only be issued in the event
                of
                consummation of the Proposed Merger and is to be transferred by Mr.
                Ng on
                an “as is basis”, except that such shares have the same lock-up
                restrictions, registration or other rights, privileges or benefits
                as Mr.
                Ng has for all other shares to be issued to him by Cablecom Holdings
                under
                the Proposed Merger terms. The 390,000 Cablecom Holdings Shares will
                only
                be issued upon receipt of releases from certain parties listed in
                the
                Settlement Agreement;




25




·
            The
                Company and each of Messrs. Ng and Pu, have agreed to modifications
                to the
                employment agreements of such persons (the “Employment Agreement
                Amendments”), reducing their time commitments to the Company and its
                subsidiary and providing that once replacement executive officers
                have
                been hired (and in the case of Mr. Ng, assuming Mr. Pu continues
                in his
                role as chief financial officer, eliminating his executive duties
                and he
                will only continue as the Chairman and a director of China Broadband
                and
                the Company), requiring in the case of Mr. Ng that he be subject
                to an
                ongoing obligation to offer acquisition candidates in the stand-alone,
                independent broadband business to China Broadband in the future (and
                recognizing that acquisition candidates involving acting as a joint
                venture provider of integrated cable television services in the People’s
                Republic of China and related activities, but which does not include
                the
                provision of Stand-Alone Broadband Services are the business of China
                Cablecom) and allowing them to continue to be involved with certain
                other
                activities and to continue in their executive capacities with Cablecom
                Holdings or its successor after the Proposed Merger. In addition,
                Mr. Ng
                has waived his right to receive all accrued salary previously owed
                to
                him;




·
            The
                Company agreed to extend the expiration dates of 4,000,000 Investor
                Warrants at an exercise price of $2.00 per share, in the Company’s private
                placement of common stock and warrants in 2007, from March of 2009,
                through January 11, 2013, upon receipt of releases from such Investor
                Warrant holders. In addition, the Company has offered to BCGU, LLC,
                WestPark Capital, Inc., Maxim Financial Corporation, who were issued
                500,000, 640,000 and 3,974,800 warrants exercisable at $.60 per share
                in
                January of 2007, the right, at their discretion, to extend the
                exercisability period of their respective warrants through January
                11,
                2013 or, in the alternative, the right to receive a scrip right to
                execute
                the unexercised portion of their warrants, at any time between the
                time of
                expiration date of their unexercised warrants and continuing through
                January 11, 2013.




Additional
      specific provisions relating to the terms of this Settlement Agreement can
      be
      found under “Item 1. Description of Business” above, and in our


Notwithstanding
        the terms of the Settlement Agreement Mr. Ng’s and Mr.
        Pu ’s
        continuing relationship with Cablecom Holdings could lead to future claims
        of
        violation of his duties them or us in the event future acquisitions in the
        PRC
        are offered to Cablecom Holdings rather than China Broadband or visa versa,
        notwithstanding the express terms of the revised employment agreement and
        provisions of the Settlement Agreement. Mr. Ng’s revised employment agreement
        with China Broadband contains an express provision permitting Mr. Ng to resign
        from China Broadband in the event an acquisition arises that involves the
        business of China Cablecom, which is how Mr. Ng currently intends to handle
        opportunities in the future that could create a situation similar to that
        which
        led to the settlement agreement.
 
 ***Simultaneous
        Closing of $4,971,250 Convertible Note and Warrant Financing***
 
 Simultaneously
        with the entry into the Settlement Agreement on January 11, 2008, and we
        entered
        into and consummated the January 2008 Financing by entering into a subscription
        agreement (the “Subscription Agreement”) with ten accredited investors
        (inclusive of Chardan Capital) with respect to the issuance of an aggregate
        of
        $4,971,250 principal amount of Notes due January 11, 2013, and Class
        A
        Warrants to
        purchase an aggregate of 6,628,333 shares of common stock of the Company
        at $.60
        per share expiring on June 11, 2013.


An
      aggregate of $4,971,250 principal amount of Notes was issued to ten investors
      including Chardan Capital which applied its 2.5% cash commission towards a
      subscription for Notes and Class A Warrants. Interest on the Notes compound
      monthly at the annual rate of five percent (5%) with the maturity date on
      January 11, 2013, if not sooner paid. Each holder of a Note can convert all
      or
      any portion of the then aggregate outstanding principal amount of the Note,
      together with interest, into shares of Common Stock at a conversion price of
      $0.75 per share, for or a total of 6,628,333 shares as of the date of issuance.
      The Notes are granted “full ratchet” anti dilution protection for the first
      three years, pursuant to which the conversion price of the Notes will be
      adjusted downward in the event of the issuance by the Company of Common Stock
      or
      rights to acquire common stock at prices below $.75 per share (or below such
      other conversion price of the Notes as is then in effect) to such lower price.
      Thereafter and until repaid, the Notes provide only for weighted average
      anti-dilution price protection adjustment. In addition, the Notes are subject
      to
      certain customary anti dilution protections for stock splits, combinations
      or
      similar transactions of the Company.




26




An
      aggregate of 6,628,333 Class A Warrants, exercisable at $0.60 per share and
      expiring on June 11, 2013 were issued pursuant to the Subscription Agreement
      as
      part of the January 2008 Financing. The Class A Warrants shall be exercisable
      (with cash or via cashless exercise) commencing one hundred and eighty-one
      (181)
      days after the closing date of the January 2008 Financing until 65 months
      thereafter, June 11, 2013. The Class A Warrants are subject to “full ratchet”
anti-dilution protection for the first three years, pursuant to which the
      exercise price of the Class A Warrants will be adjusted downward in the event
      of
      the issuance by the Company of common stock or rights to acquire Common Stock
      at
      prices below $.60 per share (or below such other exercise price of the Class
      A
      Warrants as is then in effect) to such lower price. Thereafter and until all
      Class A Warrants are exercised or expire, the Class A Warrants provide only
      for
      weighted average anti-dilution price protection adjustment. In addition, the
      Class A Warrants are subject to certain customary anti-dilution protections
      for
      stock splits, combinations or similar transactions of the Company.


*Placement
        Agent Fee and Warrants to Chardan Capital Markets, LLC*
 
 In
        connection with their engagement as a placement agent, Chardan Capital has
        been
        compensated a $10,000 due diligence fee and reimbursement of legal and other
        expenses, and a cash placement agent fee of 2.5% based on the total amount
        sold
        to investors, or $121,250 based on $4,850,000 of principal amount of Notes
        issued to other investors. Chardan Capital has, pursuant to the terms of
        their
        engagement agreement, agreed to apply their cash compensation of $121,250
        into
        an investment in a $121,250 Note and 166,667 Class
        A
        Warrants at the
        same terms as all other investors in the offering. In addition, Chardan Capital
        was compensated warrants to acquire 1,131,667 shares of the Company’s Common
        Stock at an exercise price of $.50 per share exercisable commencing January
        11,
        2008 and expiring on June 11, 2013 (the “Broker Warrants”). The Broker Warrants
        are identical to the Class
        A
        Warrants in all
        other material respects.
 
 *Assignment
        By Clive Ng of Shares to Investors; Release of Lock - Up Agreements*
 
 To
        incentivize the investors in January 2008 Financing and facilitate such
        financing, and as contemplated under the terms of the Settlement Agreement,
        Mr.
        Clive Ng assigned an aggregate of 7,017,814 shares of Common Stock beneficially
        owned by him to the January 2008 Financing investors, other than Chardan
        Capital, at a nominal purchase price of $.01 per share. This reduced the
        average
        purchase price per share to investors (presuming conversion of their notes)
        without cost to the Company.
 
 Prior
        to
        the January 2008 Financing, the Company, 88 Holdings, Inc., China Broadband
        Partners, Ltd., BCGU, LLC, MVR Investments, LLC, Stephen P. Cherner and WestPark
        Capital, Inc. were each shareholder parties to a Lock-Up Agreement dated
        as of
        January 23, 2007 (the “Lock-Up Agreement”) which was entered into in connection
        with the Share Exchange. The Lock-Up Agreement provided, that each such
        shareholder shall only be permitted to sell 5% of the shares originally issued
        to them as scheduled in the Lock-Up Agreement, during any 30 day period and,
        that the Company’s management may review the lock up provisions and increase the
        number of shares that may be sold provided that, among other conditions,
        such
        modification is made *pari
        pasu* among
        all
        shareholders to this Lock-Up Agreement based on their share ownership. As
        a
        condition subsequent to the January 2008 Financing requested by Chardan Capital,
        and to remove any contractual restrictions relating to the 7,017,084 shares
        of
        Common Stock assigned by Mr. Ng to the Note investors to facilitate the
        financing, the Company and each of the shareholder parties to the Lock-Up
        Agreement agreed to the termination of this Lock-Up Agreement for all parties
        effective as of January 13, 2008.
 
 *Board
        of Directors and Employment Agreement Amendments*
 
 Simultaneously
        with the closing of the January 2008 Financing, and entry into the Settlement
        Agreement, Messrs. David Zale, James Cassano and Jonas Grossman were appointed
        as directors of the Company, joining Messrs. Clive Ng and Yue Pu. Additional
        information relating to these appointments can be found in our “Management”
section below, which is incorporated herein.
 
 ***Shandong
        Newspaper Cooperation Agreement***
  On
        March
        7, 2008, the Company, through its indirect WFOE subsidiary in the PRC, Ji'Nan
        Zhongkuan Dian Guang Information Technology Co. ("Jinan Zhong Kuan"), entered
        into a Cooperation Agreement (the "Shandong Newspaper Cooperation Agreement")
        by
        and among itself, Shandong Broadcast & TV Weekly Press and Modern Movie
& TV Biweekly Press, each PRC companies (collectively "Shandong Newspaper").
        The Shandong Newspaper Cooperation Agreement provided for, among other terms,
        the creation of a joint venture entity in the PRC, Shandong Lushi Media Co.,
        Ltd. ("Shandong Media") that would own and operate Shandong Newspaper's
        television program guide, newspaper and magazine publishing business in the
        Shandong region of the PRC (the "Shandong Newspaper Business") which businesses
        were previously owned and operated by the Shandong Newspaper entities pursuant
        to exclusive licenses. We believe that this acquisition will be completed
        soon
        and we have begun sending payments for the purchase price of this business
        interest.


27




Under
      the
      terms of the Shnadong Newspaper Cooperation Agreement and related transaction
      documents, the Shandong Newspaper entities mentioned above will contribute
      their
      entire Shandong Newspaper Business and transfer certain employees, to Shandong
      Media in exchange for a 50% stake in Shandong Media, with the other 50% of
      Shandong Media to be owned by our Jinan Zhong Kuan operating subsidiary. In
      exchange therefore, the Cooperation Agreement provides for total initial
      consideration on the part of Jinan Zhong Kuan of approximately $1.5 million
      (approximately 10 million RMB based on exchange rates at the time) which shall
      be contributed to Shandong Media as working and acquisition capital, of which
      the Company has already paid approximately $300,000 (approximately 2 million
      RMB
      ) in early March 2008 as a down payment.




In
      addition to the initial purchase price of $1.5 million (10 million RMB), the
      Shandong Newspaper Cooperation Agreement provides for additional consideration
      of approximately US $757,757 and US $3,000,000 (between 5 million RMB and 20
      million RMB, respectively, based on exchange rates at the time) to be paid
      as a
      capital contribution to Shandong Media in the event that certain performance
      thresholds are met during the first 12 months of operations after closing the
      transaction for a total maximum purchase price of approximately $4.06 (30
      million RMB based on exchange rates at the time).. Specifically in the event
      that audited annual net profits during the first year after closing of the
      transaction relating to the Shandong Newspaper Cooperation
      Agreement:




·
            equals
                or exceeds 16 million RMB, then we will be required to contribute
                an
                additional 20 million RMB (or, approximately $3,000,000 based on
                current
                exchange rates) to the Shandong Media joint venture;




·
            equals
                or exceeds 4 million RMB but less than 16 million RMB, then we will
                be
                required to contribute 125% of such net profits to the Shandong Media
                joint venture, and




·
            is
                less then 4 million RMB, then only an additional 5 million RMB
                (approximately US $757,575 based on current exchange rates).




The
      Shandong Newspaper Business being acquired from Shandong Newspaper by the
      Shandong Media joint venture includes the distribution of periodicals, the
      publication of advertising, the organization of public relations events, the
      provision of information related services, copyright transactions, the
      production of audio and video products, the provision of audio value added
      communication services. The Shandong Newspaper Cooperation Agreement also
      provides that these businesses will be operated primarily by employees
      contracted to Shandong Media through secondment by the respective Shandong
      Newspaper entities.




In
      addition, the Shandong Newspaper entities are required, at closing upon
      completion of all closing conditions, to enter into an Exclusive Advertising
      Agency Agreement and an Exclusive Consulting Services Agreement with Shandong
      Media which require that the Shandong Newspaper entities shall appoint Shandong
      Media as its exclusive advertising agent and provider of technical and
      management support for a fee.




The
      closing of the transaction is dependant upon, among other conditions, the
      obtaining of all necessary PRC government consents, payment of the initial
      purchase price set forth above, and entry into the Exclusive Advertising Agency
      Agreement and Exclusive Consulting Service Agreement.




Additional
      information relating to the Shandong Newspaper Business can be found at the
      end
      of the “Recent Developments” subsection of “Item 1. Description of Business”
above.




**Results
      of Operations**




The
      Company was a development stage company with no business operations during
      the
      year ended December 31, 2006 (“2006”). Operating activity during 2006 relates to
      the formation of our China Broadband Cayman subsidiary, its entry into
      agreements to acquire Jinan Broadband and related due diligence, raising capital
      for the same, and the interest expense associated with its $325,000 principal
      amount of 7% Convertible Promissory Notes issued on September 22, 2006.




Effective
        January 23, 2007 we acquired China Broadband Cayman and its operations which
        was
        already a party to a Cooperation Agreement to acquire PRC based Jinan Broadband.
        Effective April 1, 2007, China Broadband Cayman, Inc. and our WFOE, completed
        the acquisition of the Jinan Broadband subsidiary. During 2006 Jinan Broadband
        did not operate as its own separate entity and constituted assets within
        a
        business division that was separated out immediately prior to our acquisition.
        Accordingly, increases in revenues, profits and expenses for the year ended
        December 31, 2007 were primarily attributable to the commencement of operations
        of the newly acquired assets which are operating independently for the first
        time. Accordingly, Jinan Broadband results for the year ended December 31,
        2006
        were not included for comparative purposes as management believes that they
        are
        not meaningful.




Our
      revenues are based on the number of paying cable broadband internet customers
      in
      the Shandong province of China. As of December 31, 2007, Jinan Broadband
      had approximately 58,000 active paying subscribers for its services in this
      region as compared to 45,000 in 2006. The increase is a result of increased
      efforts on internal growth by Jinan Broadband after our acquisition of them.
      Management believes that there are a total of 1.3 million homes that are
      estimated to have cable access in the Jinan region of
      Shandong, approximately 80% of which already have cable access and 20%
      have internet access in some form. (See, www.jinan.gov.cn).




28




Our
      gross
      revenues are dependent on several factors:




·
            the
                amount that we are permitted to charge for cable broadband internet
                services in the regions we operate in,


·
            the
                number of subscribers we have in each
                region,


·
            advertising
                revenues, and


·
            other
                revenues from other permitted value added services that we
                perform.





We
      intend
      to develop our business by growing internally to increase the subscribers for
      our services in the regions we operate and by acquiring licenses to operate
      the
      cable broadband business in other regions.





Our
      cost
      of revenue consists primarily of the costs of products or services sold to
      customers and personnel and other direct costs associated with providing
      technical services. In the future, we may expand or increase the discounts
      we
      offer to our customers and may otherwise alter our pricing structures and
      policies. These changes would negatively reduce our gross margins. In addition
      to pricing strategy, our gross margins will fluctuate based on other factors,
      including:




·
            the
                cost of our products, including the extent of purchase volume discounts
                we
                are able to obtain from our suppliers;


·
            promotions
                or special offers that we offer to attract new customers;
                and


·
            the
                mix of products within each brand category that our customers
                purchase.




Our
      selling, general and administrative expenses consist of personnel costs
      including taxes and benefits, rent and utilities, contract labor, insurance,
      marketing, telecommunication and Internet costs, and other administrative
      expenses. We expect selling, general and administrative expenses to increase
      as
      we grow our business ***.***




***Year
      Ended December 31, 2007*** **** ***Compared
      to the Year Ended December 31, 2006***


*Revenues*





Revenue
      for the year ended December 31, 2007 (“2007”) was $3,004,092 as compared to $0
      for the year ended December 31, 2006 (“2006”). During 2006, and prior to our
      acquisition of China Broadband Cayman, we had no operations. Revenue during
      2007
      was attributed to our PRC subsidiary, Jinan Broadband and consisted of sales
      to
      our PRC based Internet consumers, cable modem consumers, business customers
      and
      other internet and cable services. We expect that our revenues will increase
      as
      we continue to grow our business and add new regions.





*Gross
      Profit*





Gross
      profit for 2007 was $1,346,113 as compared to $0 for 2006. During 2006 we had
      no
      operations. Gross profit as a percentage of revenue was 44.8% for
      2007.





*Selling,
      General and Administrative Expenses*





Selling,
      general and administrative expenses for 2007 were $980,505 as compared to
      $116,073 for 2006. During 2006 we had no operations and all expenses during
      the
      period related to formation costs associated with China Broadband Cayman.
      Selling, general and administrative expenses during 2007 included salaries
      and
      personnel costs of approximately $434,000 and travel expenses of approximately
      $116,000. We expect that our selling, general and administrative expenses will
      increase as we continue to grow our business and add new regions.





*Professional
      Fees*





Professional
      fees for 2007 were $628,490 as compared to $52,105 for 2006. During 2006 we
      had
      no operations and all expenses during the period related to formation costs
      associated with China Broadband Cayman. Professional Fees during 2007 included
      legal costs of approximately $156,000, accounting fees of approximately $250,000
      and consultant costs of approximately $222,000. These costs were incurred
      primarily for services performed relating to the Share Exchange, the acquisition
      of Jinan Broadband and for public company reporting and corporate governance
      expenses. We expect our costs for professional services to remain significant
      as
      we continue to acquire new entities and implement our strategy as set forth
      above and more specficially, as a result of the Settlement Agreement and related
      transactions, the January 2008 Financing and the acquisition of Shandong
      Newspaper in first quarter of fiscal 2007.




29




*Depreciation*





Depreciation
      expense for 2007 was $1,718,307 as compared to $0 for 2006. During 2006 we
      had
      no operating assets. Depreciation expense during 2007 relates to the
      depreciation on the approximately $10 million of property, plant and equipment,
      net at our Jinan broadband subsidiary.





*Interest
      and Other Income (Expense), net*





We
      incurred an expense of $404,555, in interest and other income (expense), net,
      during 2007. This amount consisted primarily of the expense related to our
      requirement to issue new shares in the amount of $410,053, as a result of our
      not registering the 1,300,000 shares issued upon the conversion of our 7%
      Convertible Promissory Notes in the time frame required. This amount was
      partially offset by interest income earned on our cash balances.





During
      2006 we had no operations and incurred $6,762 in interest expense related to
      China Broadband Cayman’s $325,000 principal amount of 7% Convertible Promissory
      Notes. All of the 7% Convertible Promissory Notes were converted at the end
      of
      February 2007 with all interest paid thereon.





We
      expect
      to continue to incur interest expenses in connection with our issuance of our
      $ 4,971,250
      principal amount of Notes issued in January 2008, which compounds monthly at
      the
      annual rate of five percent (5%) with the maturity date on January 11, 2013.





*Minority
      Interest*





49%
      of
      the operating loss of our Jinan Broadband subsidiary is allocated to Jinan
      Parent. During 2007 $358,923 of our operating losses were allocated to Jinan
      Parent





*Income
      Tax Benefit*





Our
      income tax benefit was $50,068 for 2007. During 2006 we had no
      operations.





**Liquidity
      and Capital Resources**





As
      of
      December 31, 2007 we had $472,670 of cash on hand and a working capital deficit
      of $3,383,312. As of December 31, 2007, we had total current liabilities of
      $4,723,678. Given our current commitments and working capital, we cannot support
      our operations for the next 12 months without additional capital.





On
      January 23, 2007 we completed the first closing of our private placement
      offering and completed our Share Exchange with China Broadband Cayman.





Through
      December of 2007 we raised an aggregate of $4,000,000 in the private placement
      offering with net proceeds of $3,579,500, including issuance costs, and issued
      an aggregate of 8,000,000 shares and 4,000,000 warrants. Total issuance costs
      approximated $420,500.


We
        used
        approximately $2,572,125 of the proceeds of the offering towards the cost
        of our
        first half installment payment for the 51% interest in Jinan Broadband in
        2007.
        We used $10,490 to repay interest accrued through February 28, 2007, on the
        $325,000 principal amount of 7% Convertible Promissory Notes issued in September
        of 2006 by China Broadband Cayman, the obligations of which were assumed
        by us.
        All of these Convertible Notes have been converted into an aggregate of
        1,300,000 shares of common stock as of February 28, 2007, with interest paid
        through such date in cash. We have not registered the 1,300,000 shares that
        were
        issued upon conversion of the 7% Convertible Promissory Notes and were required
        to pay a penalty of new share issuances to said shareholders at the end of
        each
        month that the shares are not registered beginning August 2007. Through the
        year
        ended December 31, 2007 we were required to issue 170,855 shares as a penalty
        to
        said shareholders and recorded an expense of $410,053 related to this issuance,
        all of which were issued during early 2008.




*5%
      Convertible Notes and Class A Warrants Issued January 11, 2008*





On
      January 11, 2008 we entered into and consummated a subscription agreement with
      ten accredited investors with respect to the issuance of an aggregate of
      $4,971,250 principal amount of Notes due January 11, 2013, and Class A Warrants
      to purchase an aggregate of 6,628,333 shares of common stock of the Company
      at
      $.60 per share expiring on June 11, 2013. In March 2008 we used approximately
      $3.2 million of these proceeds to fund our second payment for our purchase
      of
      Jinan Broadband. In addition, in March 2008 we used $300,000 to fund our down
      payment under the Shandong Newspaper Cooperation Agreement to Shandong Media
      and
      expect to utilize an additional $1.2 million to fund the remaining portion
      of
      our required working capital contribution.




30




*Cash
      Flows*





Operating
      activities for 2007 and 2006, after
      adding back non-cash items, provided (used) cash of approximately $156,283
      and
      $(124,940), respectively . During
      such period other changes in working capital provided cash of approximately
      $1,268,723 and $6,763, respectively, resulting in cash being provided by (used
      in) operating activities of $1,425,006 and $(118,177), respectively. During
      2006
      operating activities related to the formation of our China Broadband Cayman
      subsidiary.





Investing
      activities for 2007 and 2006 used cash of $2,443,055 and $0, respectively.
      The
      2007 amounts consisted solely of additions to property and equipment.




Financing
      activities for 2007 and 2006 provided cash of $1,351,297 and $221,347,
      respectively. For 2007, this amount consisted of proceeds from the private
      placement of $4,000,000 partially offset by $420,500 of payments related to
      issuance costs associated with the private placement offering and our payable
      to
      Jinan Parent of $2,228,203. For 2006 this
      amount consisted of the issuance of China Broadband Cayman’s $325,000 principal
      amount of 7% Convertible Promissory Notes issued on September 22, 2006 partially
      offset by $103,653
      of payments related to issuance costs associated with the convertible
      notes .





Our
      Jinan
      Broadband subsidiary, which is our only operating subsidiary at year end 2007
      is
      located in China. All of its operations are conducted in its local currency
      the
      Chinese Yuan also known as Renminbi or RMB. The effect of exchange rates on
      cash
      between the Chinese Yuan and the United States dollar, provided cash of $36,252
      during 2007.





*Need
      for Additional Capital*


We
        have
        raised approximately $4.8 million (net of cost of capital and expenses) in
        our
        January 2008 Financing in order to fund our second payment for our purchase
        of
        Jinan Broadband, which payment was due in January of 2008 and to acquire
        Shandong Newspaper and cover the cost of interim operations. We made the
        second
        and last payment for Jinan Broadband in March of 2008 and incurred no penalty
        for making this payment in March. In
        addition, in March and April 2008 we used $300,000 to fund our down payment
        under the Shandong Newspaper Cooperation Agreement to Shandong Media and
        expect
        to utilize an additional $1.2 million to fund the remaining portion of our
        required working capital contribution. Management does believe that the Company has sufficient capital to sustain
        its
        operations without raising additional capital.





We
      intend
      to grow primarily through marketing to increase our subscriber base and through
      acquisitions of China based broadband, internet and cable businesses. Our
      strategy also includes completion of our acquisition of Shandong Newspaper
      (which we believe is imminent) in a Joint Venture. Shandong Newspaper’s business
      includes three main magazines: Shandong Broadcast & TV Weekly (Newspaper),
      TV Weekly Magazine and Mordern Movie Times Magazine (Bi-Weekly). We intend
      to
      invest our acquisition cost in this Joint Venture to increase sales and
      advertising revenues of its periodicals in order to become profitable. No
      assurance can be made that we will be able to raise capital if and as needed
      to
      implement this business plan or, if implemented, that it will be successful.





The
      amount and timing of our future capital requirements will depend upon many
      factors, including the number and size of opportunities available to us, the
      level of funding received by us, anticipated private placements of our common
      stock, the level of funding obtained through other financing sources, and the
      timing of such funding. In the event we are unable to raise additional capital
      we will not be able to sustain any growth or continue to operate.




*Dividends*




We
      intend
      to retain any future earnings to finance the expansion of our business and
      any
      necessary capital expenditures, and for general corporate purposes. Moreover,
      even if we are profitable as a result of our PRC based operations and
      subsidiaries, PRC regulations prevent the payment of dividends absent compliance
      with certain rules and obtaining appropriate government consents, which we
      believe will not happen in the near future, if ever.





*Financial
      Commitments*




The
      Company pays approximately $55,000 (400,000 RMB) annually for rent at its
      facilities in Jinan, China, renewable on an annual basis.





The
      Company utilizes approximately 1,000 square feet of space from Maxim Financial
      Corporation for its corporate headquarters for a monthly rental fee of $2,000.
      Maxim Financial Corporation provided consulting services to the Company during
      the years ended December 31, 2007 and 2006 and has agreed to discharge all
      rental costs under the terms of its consulting agreement with the Company
      through December 2007. In addition, Maxim Financial Corporation has agreed
      to
      defer all monthly rental payments beginning January 2008 until the Company’s
      next capital raise subsequent to January 2008. We intend to move our United
      States corporate offices in mid 2008.




31




**Critical
      Accounting Policies**





Our
      discussion and analysis of financial condition and results of operations is
      based on our consolidated financial statements, which have been prepared in
      accordance with accounting principles generally accepted in the United States. The
      preparation of financial statements and related disclosures in conformity with
      accounting principles generally accepted in the United States of America
      requires our management to make judgments, assumptions and estimates that affect
      the amounts reported in the consolidated financial statements and accompanying
      notes. Note 2 to the consolidated financial statements elsewhere in this Annual
      Report on Form 10-KSB describes the significant accounting policies and methods
      used in the preparation of the consolidated financial statements. The following
      critical accounting policies are impacted significantly by judgments,
      assumptions and estimates used in the preparation of the consolidated financial
      statements.





*Principles
      of Consolidation*





The
      consolidated financial statements include the accounts of the China Broadband,
      Inc. and its wholly-owned subsidiaries, China Broadband Cayman, our WOFE and
      Jinan Broadband. All material intercompany transactions and balances are
      eliminated in consolidation.





*Accounting
      Method*





The
      Company's policy is to use the accrual method of accounting to prepare and
      present financial statements, which conform to generally accepted accounting
      principles (GAAP). The Company has elected a December 31, year-end.





*Estimates*





The
      preparation of financial statements in conformity with generally accepted
      accounting principles requires management to make estimates and assumptions
      that
      affect the reported amounts of assets and liabilities and disclosure of
      contingent assets and liabilities at the date of the financial statements and
      the reported amounts of revenues and expenses during the reporting period.
      Actual results could differ from those estimates.





*Accounts
      Receivable*




Accounts
      receivable are recorded at the invoiced amount after deduction of trade
      discounts, business tax and allowance. The Company considers accounts receivable
      to be fully collectible; accordingly, no allowance for doubtful accounts has
      been established.





*Inventories*





Inventories,
      consisting of cables, fiber, connecting material, power supplies and spare
      parts
      are stated at the lower of cost or market value. Cost is determined using the
      first-in, first-out (FIFO) method





*Property
      and Equipment*





Property
      and equipment are stated at cost less accumulated depreciation. Expenditures
      for
      major renewals and betterments, which extend the original estimated economic
      useful lives or applicable assets, are capitalized. Expenditures for normal
      repairs and maintenance are charged to expense as incurred. The costs and
      related accumulated depreciation of assets sold or retired are removed from
      the
      accounts, any gain or loss thereon is reflected in operations.





Depreciation
      is provided for on the straight line basis over the estimated useful lives
      of
      the respective assets over a period of five years.





*Intangible
      Assets*





We
      will
      perform indefinite life intangible asset impairment
      tests on an annual basis and between annual tests in certain
      circumstances. To
      determine the fair value of these intangible assets, there are many assumptions
      and estimates used that directly impact the results of the testing. In making
      these assumptions and estimates, the
      Company must make various assumptions regarding estimated future cash flows
      and
      other factors in determining the fair values of the respective assets.
      W e
      will
      use set criteria that are reviewed and approved by various levels of management,
      and we will estimate the fair value of our reporting units by using discounted
      cash flow analyses. If these
      estimates or their related assumptions change in the future, the Company may
      be
      required to record impairment charges for these assets in future periods. Any
      such resulting impairment charges could be material to the Company’s results of
      operations.




32




*Revenue
      Recognition*





Sales
      are
      recorded as services are provided to customers. Provision for discounts and
      rebates to customers, estimated returns and allowances and other adjustments
      are
      provided for in the same period when related sales are recorded.





*Income
      taxes*





Deferred
      taxes are recognized for the future tax consequences attributable to temporary
      differences between the carrying amounts of assets and liabilities for financial
      statement purposes and income tax purposes using enacted rates expected to
      be in
      effect when such amounts are realized or settled. The effect on deferred taxes
      of a change in tax rates is recognized in income in the period that includes
      the
      enactment date.




*Foreign
      Currency Translation*





The
      Company’s Jinan Broadband subsidiary located in China uses its local currency
      (RMB) as its functional currency. Translation adjustments are reported as other
      comprehensive income or expenses and accumulated as other comprehensive income
      in the equity section of the balance sheet. The financial information is
      translated into U.S. Dollars at prevailing or current rates respectively, except
      for revenue and expenses which are translated at average current rates during
      the reporting period.





**Recent
      Accounting Pronouncements**





In
      September 2006, the FASB issued SFAS No. 157, “Fair Value Measurements” (SFAS
      No. 157). The purpose of SFAS No. 157 is to define fair value, establish a
      framework for measuring fair value, and enhance disclosures about fair value
      measurements. The measurement and disclosure requirements are effective for
      the
      company beginning in the first quarter of fiscal year 2008.





In
      February 2007, the FASB issued SFAS No. 159, “The Fair Value Option for
      Financial Assets and Financial Liabilities” (SFAS No. 159). SFAS
      No. 159 permits companies to choose to measure certain financial
      instruments and certain other items at fair value. The standard requires that
      unrealized gains and losses on items for which the fair value option has been
      elected be reported in earnings. SFAS No. 159 is effective for the company
      beginning in the first quarter of fiscal year 2008, although earlier adoption
      is
      permitted.





In
      December 2007, the FASB issued SFAS No. 141 (R), “Business
      Combinations” (“SFAS 141(R)”) and SFAS No. 160, “Noncontrolling Interests
      in Consolidated Financial Statements” (“SFAS 160”). The standards are intended
      to improve, simplify, and converge internationally the accounting for business
      combinations and the reporting of noncontrolling interests in consolidated
      financial statements. SFAS 141(R) requires the acquiring entity in a business
      combination to recognize all (and only) the assets acquired and liabilities
      assumed in the transaction; establishes the acquisition-date fair value as
      the
      measurement objective for all assets acquired and liabilities assumed; and
      requires the acquirer to disclose to investors and other users all of the
      information they need to evaluate and understand the nature and financial effect
      of the business combination. SFAS 141(R) is effective for fiscal years, and
      interim periods within those fiscal years, beginning on or after
      December 15, 2008. SFAS 141(R) applies prospectively to business
      combinations for which the acquisition date is on or after the beginning of
      the
      first annual reporting period beginning on or after December 15, 2008.
      Earlier adoption is prohibited.





SFAS
      160
      is designed to improve the relevance, comparability, and transparency of
      financial information provided to investors by requiring all entities to report
      noncontrolling (minority) interests in subsidiaries in the same way—as equity in
      the consolidated financial statements. Moreover, SFAS 160 eliminates the
      diversity that currently exists in accounting for transactions between an entity
      and noncontrolling interests by requiring they be treated as equity
      transactions. SFAS 160 is effective for fiscal years, and interim periods within
      those fiscal years, beginning on or after December 15, 2008. Earlier
      adoption is prohibited. In addition, SFAS 160 shall be applied prospectively
      as
      of the beginning of the fiscal year in which it is initially applied, except
      for
      the presentation and disclosure requirements. The presentation and disclosure
      requirements shall be applied retrospectively for all periods presented. The
      Company does not have an outstanding noncontrolling interest in one or more
      subsidiaries and therefore, SFAS 160 is not applicable to the Company at this
      time.





Management
      does not believe that any recently issued, but not yet effective, accounting
      standards, if currently adopted, would have a material effect on the
      accompanying financial statements.





**Off-Balance
      Sheet Arrangements**





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





33


**Item
      7. Financial Statements**





Please
      see the “F” pages at the end of this Annual Report for financial statements for
      the calendar years ended December 31, 2007 and 2006.





**Item
      7A. Quantitative and Qualitative Disclosures About Market
      Risk**




All
      of
      our foreign operations are conducted in China and the Renminbi is the national
      currency in which its operations are conducted. We have not utilized any
      derivative financial instruments or any other financial instruments, nor do
      we
      utilize any derivative commodity instruments in its operations, nor any similar
      market sensitive instruments.




The
      exchange rate between the Renminbi and the U.S. dollar is subject to the PRC
      foreign currency conversion policies which may change at any time. The exchange
      rate at March 24, 2008 was approximately 7.05 Renminbi to 1 U.S. dollar, and
      the
      exchange rate is currently permitted to float within a very limited range.




We
      believe that the weakening US dollar currently exposes us to significant market
      risk. We currently raise capital in the US to fund our acquisitions and growth
      in China. If the US dollar continues to weaken against the Renminbi we may
      be
      required to raise additional capital not anticipated or we may not be able
      to
      continue to operate, make required payments for agreements entered into or
      fund
      new acquisitions.





The
      Company primarily invests its cash in checking, bank money market and savings
      accounts. As of
      March 24, 2008, the Company had not entered into any type of hedging or interest
      rate swap transaction.





**Item
      8. Changes in and Disagreements with Accountants on Accounting and Financial
      Disclosure**





None.




**Item
      8A(T)****Controls
      and Procedures**





*Evaluation
      of Disclosure Controls and Procedures*




Management
      has reviewed the effectiveness of our "disclosure controls and procedures"
      (as
      defined in the Securities Exchange Act of 1934 Rules 13a-15(e) and 15d-15(e))
      as
      of the end of the period covered by this report and have concluded that the
      disclosure controls and procedures are effective to ensure that material
      information relating to the Company is recorded, processed, summarized, and
      reported in a timely manner.





*Changes
      in Internal Control Over Financial Reporting*





There
      have been no changes in the Company's internal control over financial reporting
      during the last quarterly period covered by this report that have materially
      affected, or are reasonably likely to materially affect, the Company's internal
      control over financial reporting.





*Management’s
      Report on Internal Control Over Financial Reporting*





Management
      is responsible for establishing and maintaining adequate internal control over
      financial reporting as defined in Rules 13a-15(f) and 15d-15(f) under the
      Securities Exchange Act of 1934, as amended. The Company’s internal control over
      financial reporting is designed to provide reasonable assurance regarding the
      reliability of financial reporting and the preparation of financial statements
      for external purposes in accordance with generally accepted accounting
      principles. The Company’s internal control over financial reporting includes
      those policies and procedures that:





(i)
            pertain
                to the maintenance of records that, in reasonable detail, accurately
                and
                fairly reflect the transactions and dispositions of the assets of
                the
                Company;





(ii)
            provide
                reasonable assurance that transactions are recorded as necessary
                to permit
                preparation of financial statements in accordance with generally
                accepted
                accounting principles, and that receipts and expenditures of the
                Company
                are being made only in accordance with authorization of Management;
                and





(iii)
            provide
                reasonable assurance regarding prevention or timely detection of
                unauthorized acquisition, use or disposition of the Company’s assets that
                could have a material effect on the financial
                statements.





Because
      of inherent limitations, internal control over financial reporting may not
      prevent or detect misstatements. Also, projections of any evaluation of
      effectiveness to future periods are subject to risk that controls may become
      inadequate because of changes in conditions, or the degree of compliance may
      deteriorate.




34




Management
      assessed the effectiveness of the Company’s internal control over financial
      reporting as of December 31, 2007. In making this assessment, management used
      the criteria set forth by the Committee of Sponsoring Organization of the
      Treadway Commission (COSO) in Internal Control-Integrated Framework. Based
      on
      that assessment, Management has concluded that the Company’s internal control
      over financial reporting was effective as of December 31, 2007. Nonetheless,
      because of previous late filings during the 2007 year and because of our PRC
      operations, management is in the process of retaining a PRC based consultant
      to
      assist with financial accounting processing and reporting.


This
        Form
        10-KSB does not include an attestation report of the Company's registered
        public
        accounting firm regarding internal control over financial reporting.
        Management's report was not subject to attestation by the company's registered
        public accounting firm pursuant to temporary rules of the Securities and
        Exchange **** Commission
        that permit the Company to provide only management's report in this annual
        report.
  **Item
        8B.****Other
        Information**
 
 Effective
        as of the March 13, 2008, the board of directors of the Company approved
        the
        China Broadband, Inc. 2008 Stock Incentive Plan (the “Plan”), pursuant to which
        options or other similar securities may be granted. Qualified or Non-qualified
        Options to purchase up to 2,500,000 shares of the Company’s common stock may be
        issued under the Plan. The Plan may also be administered by an independent
        committee of the board of directors. 100,000 options have been granted to
        Mr.
        Urbach pursuant to his employment agreement with the Company (as described
        below).




35


**PART
      III**





**Item
      9. Directors, Executive Officers, Promoters, Control Persons And Corporate
      Governance; Compliance With Section 16(a) Of The Exchange Act**





**Executive
      Officers and Directors**





Prior
      to
      the Share Exchange, our only two directors and officers were Mark L. Baum,
      Esq.
      (our former President and CFO) and James B. Panther, II (our former Secretary)
      both of which resigned effective as of the completion of the Share Exchange
      on
      January 23, 2007.





The
      officers of the Company immediately after the Share Exchange on January 23,
      2007
      and as of the date hereof are as set
      forth
      in the below chart.


In
        addition, while Mr. Jiang Bing was appointed as a director on January 23,
        2007,
        he has since resigned as of May 18, 2007 due to personal reasons.


Simultaneously
      with the closing of the January 2008 Financing in January of 2008, and entry
      into the Settlement Agreement, Messrs. David Zale, James Cassano and Jonas
      Grossman were appointed as directors of the Company, joining Messrs. Clive
      Ng
      and Yue Pu. Prior to the appointment of Messrs. Zale, Cassano and Grossman,
      such
      persons had no affiliations or business relationship with the Company, except
      that Mr. Grossman was and continues to be, a partner and officer of Chardan
      Capital which received a placement agent fee of notes and warrants in connection
      with the January 2008 Financing as described above. Additionally, the board
      appointed Mr. Tom Lee as new Chief Executive Officer and Principal Executive
      Officer on January 11, 2008:





**Name**
            
            **Age**
            
            **Position**Marc
                Urbach
            
            35
            
            President,
                Principal Executive OfficerTom
                Lee
            
            50
            
            Chief
                Executive Officer (January 11,2008 - April 8, 2008)Clive
                Ng
            
            45
            
            Chairman,
                DirectorYue
                Pu
            
            35
            
            Vice
                Chairman of China Broadband, Ltd. and China Broadband, Inc., and
                Principal
                Accounting Officer and Principal Financial OfficerJames
                Cassano
            
            61
            
            DirectorDavid
                Zale
            
            54
            
            DirectorJonas
                Grossman
            
            33
            
            Director





**Marc
      Urbach** has over
      twelve years of accounting, finance, and operations experience in both large
      and
      small companies. He was the Executive Vice President and Chief Financial Officer
      of Profile Home Inc., a privately held importer and distributor of home
      furnishings from September 2004 until February 2008. He additionally served
      on
      the board and was part owner of Tri-state Trading LLC, a related import company
      during that same time period. Mr. Urbach was a Director of Finance at Mercer
      Inc., a Marsh & McLennan Company from 2002 to 2004. He was a Finance Manger
      at Small World Media from 2000 until 2002 and held a similar position at The
      Walt Disney Company from 1998 to 2000. He started his career at Arthur Andersen
      LLP as a senior auditor from 1995 to 1998. Mr. Urbach received his Bachelor
      of
      Science in Accounting from Babson College in 1995.





**Clive
      Ng** currently a non-executive Chairman and Director of the Company and China
      Broadband, Ltd., has been a director and officer of the Company since January
      of
      2007 and of China Broadband, Ltd. since August of 2006. Mr. Ng also currently
      serves as a Senior Advisor to Warner Music Group Inc. (NYSE: WMG). Mr. Ng
      has served as executive chairman of the board and President of China Cablecom
      Ltd. since its inception on October 6, 2006 and as a director,
      Executive Chairman and President of China Cablecom Holdings since
      October 2007. From 2000 to 2003, he was the Chief Executive Officer of
      Pacific Media PMC, a home shopping company. Mr. Ng co-founded TVB
      Superchannel Europe in 1992, which has grown to become Europe’s leading Chinese
      language broadcaster. He also owned a 50% stake in HongKong SuperNet, the first
      Hong Kong based ISP which was then sold to Pacific Internet (NASDAQ:PCNTF).
      Mr.
      Ng was Chairman and founder of Asiacontent (NASDAQ:IASIA), one of the first
      Asian internet companies to list in the United States, that has been a joint
      venture partner with NBCi, MTVi, C-NET, CBS Sportsline and DoubleClick in Asia.
      Mr. Ng was also one of the initial investors and founder of E*TRADE Asia, a
      partnership with E*TRADE Financial Corp (NYSE: ET). Mr. Ng was a founding
      shareholder of MTV Japan, with H&Q Asia Pacific and MTV Networks
      (a division of Viacom Inc).




**Yue
      Pu** is and
      has been an executive officer of the Company and its operating subsidiary since
      January of 2007. Mr. Pu also serves as general manager and Chief Executive
      Officer of China Cablecom since its inception in 2006 and Chief Executive
      Officer and Acting Chief Financial Officer of China Cablecom Holdings since
      October 2007 a cable company that operates in the Jinan region of the Shandong
      province of China. Mr. Pu carries with him more than a decade of PRC based
      media
      industry experience spanning across publishing, Internet and TV sectors. From
      2005 to 2006, Mr. Pu was with China Media Networks, the TV media arm of HC
      International, as BD director, before starting up Jinan Broadband in 2006.
      From
      2003 to 2005, Mr. Pu was with Outlook Weekly of Xinhua News Agency as a
      strategic advisor and BD director. From 1999 to 2000, he was a director and
      a
      member of the founding team for Macau 5-Star Satellite TV, a mainland China
      satellite TV channel venture. From 1997 to 1999, he joined Economic Daily,
      and
      was head of the Internet arm of one of China's most popular business and
      entrepreneur magazines. From 1993 to 1997 **,** Mr. Pu
      was an intelligence officer with China's National Security Service and a
      logistics specialist with a joint venture between Crown Cork & Seal and John
      Swire & Sons in Beijing. Mr. Pu received an MBA from Jones Graduate School
      of Business of Rice University in 2002 and Bachelor in Law from University
      of
      International Relations in China in 1993.




36




**James
      S. Cassano** was
      appointed as director of the Company effective as of January 11, 2008. Mr.
      Cassano has served as executive vice president, chief financial officer,
      secretary and director of Jaguar Acquisition Corporation a Delaware corporation
      (OTCBB:JGAC), a blank check company, since its formation in June 2005. Mr.
      Cassano has served as a managing director of Katalyst LLC, a company which
      provides certain administrative services to Jaguar Acquisition Corporation,
      since January 2005. From February 2004 to December 2004, Mr. Cassano was an
      independent consultant engaged by a number of corporate clients in the area
      of
      corporate organization, corporate development and mergers and acquisitions.
      In
      June 1998, Mr. Cassano founded New Forum Publishers, an electronic publisher
      of
      educational material for secondary schools, and served as its chairman of the
      board and chief executive officer until it was sold to Apex Learning, Inc.,
      a
      company controlled by Warburg Pincus, in August 2003. He remained with Apex
      until November 2003 in transition as vice president business development and
      served as a consultant to the company through February 2004. In June 1995,
      Mr.
      Cassano co-founded Advantix, Inc., a high volume electronic ticketing software
      and transaction services company which handled event related client and customer
      payments, that was re-named Tickets.com and went public through an IPO in 1999.
      Mr. Cassano served as its chairman of the board and chief executive officer
      until December 1997. From March 1987 to June 1995, Mr. Cassano served as senior
      vice president and chief financial officer of the Hill Group, Inc., a
      privately-held engineering and consulting organization, where he was responsible
      for corporate finance, acquisitions and divestitures as well as all corporate
      information technology functions. From February 1986 to March 1987, Mr. Cassano
      served as vice president of investments and acquisitions for Safeguard
      Scientifics, Inc., a public venture development company, where he was
      responsible for analyzing and closing investments in ventures, and providing
      management support of companies in which Safeguard had investments. From May
      1973 to February 1986, Mr. Cassano served as partner and director of strategic
      management services (Europe) for the strategic management group of Hay
      Associates, where among other responsibilities, he lead or held management
      responsibility for the majority of the firm’s strategic and large scale
      organization projects in financial services. Mr. Cassano received a B.S. in
      Aeronautics and Astronautics from Purdue University and an M.B.A. from Wharton
      Graduate School at the University of Pennsylvania.





**David
      Zale** was
      appointed as a director of the Company effective as of January 11, 2008. Mr.
      Zale founded Zale Capital Management, L.P. in January 2006. Mr. Zale advises
      clients on investments in hedge funds and customizes hedge fund-of-funds for
      high net worth individuals and institutions. In addition, Mr. Zale advises
      clients on their total portfolio, assisting clients in developing Investment
      Policy Statements and executing portfolio allocations. Mr. Zale holds the
      Chartered Financial Analyst designation and holds a FINRA Series 7 license
      through USF Securities, L.P. and his Series 63 and 65 licenses through USF
      Advisors, LLC, a registered Investment Advisor and conducts securities
      transactions through these entities, both of which are otherwise unaffiliated
      with Zale Capital Management, L.P. Mr. Zale has had ten years of financial
      services experience. From July, 2003 until December, 2005, Mr. Zale served
      as
      the Managing Director for Inaltra Capital Management, Inc., an Investment
      Advisor specializing in hedge fund-of-funds, which he helped to launch. Prior
      to
      that, Mr. Zale held positions with hedge fund-of-funds related investment
      advisors. In addition, he has had additional experience on the sell side,
      ultimately leading to a position as director of research. Prior to entering
      the
      financial services industry, Mr. Zale spent over eighteen years in the jewelry
      industry. He is the chairman of the Investment Committee of the M.B. and Edna
      Zale Foundation of Dallas, and a past chairman of the Investment Committee
      of
      Central Synagogue of New York. Mr. Zale is a graduate of the University of
      Colorado with a degree in Political Science.





**Jonas
      Grossman** was
      appointed as a director of the Company effective as of January 11, 2008. Mr.
      Grossman has over nine years of experience in the financial services industry.
      Mr. Grossman is and has been a Partner and Head of Capital Markets of Chardan
      Capital, a FINRA member firm which he joined in January, 2004. In addition,
      Mr.
      Grossman founded Cornix Management LLC, a multi-strategy hedge fund in December,
      2006. From April, 2001 until December, 2003, Mr. Grossman was a Vice-President
      at Ramius Capital Group, LLC, an international, multi-strategy hedge fund and
      FINRA member firm, where he also worked as Head Trader. He was a Senior Trader
      at Windsor Capital Advisors, LLC from June, 2000 until March, 2001 and worked
      as
      a trader making markets at Aegis Capital Corp., from February, 1999 until June,
      2000. Mr. Grossman received his Bachelor of Arts in Economics from Cornell
      University in 1997. He has also studied at the London School of Economics and
      the Leonard N. Stern School of Business at New York University.




37




**Other
        Management**




**Tom
      Lee** was
      appointed as Chief Executive Officer effective as of January 11, 2008 through
      April 8, 2008 and has since been serving in a non executive capacity as Director
      of Business Development for the Company. Mr. Lee has twenty years of successful
      business development and management experience in high-tech industry and
      extensive hands-on experiences as co-owner and director of business development
      in the PRC. Mr. Lee has served as Vice President of Business Development of
      TiVO
      Great China (TGC) Inc. since 2006. Prior to such time and since 2005, Mr. Lee
      served as General Manager of Sales and Marketing of DVN Broadband Technologies
      Inc. Between 1999 and 2003, Mr. Lee was the VP of Asia Sales and Marketing
      of
      nSTREAMS Technologies Inc., an international provider of Interactive TV and
      video server based technologies. Prior to this time and since 1995, he became
      the Director of Business Development of Silicon Graphics Inc., Asia-Pacific,
      a
      company which provides high-performance server and storage solutions. Mr Lee
      was
      employed in various capacities for Silicon Graphics, Inc. Mr. Lee served as
      the
      VP of Sales from 1987 to 1988 for Apollo Computer Corporation in Taiwan. From
      1985 to 1986, Mr. Lee served as Director of Sales for the Minicomputer System
      Division of Systex Corp in Taiwan. Before that, he was the Sales Manager of
      Oversea Computer Corp in Taiwan since 1981. Mr. Lee received training at SGI
      senior manager training school from 1995 to 1997. He attended the Stanford
      University Economic Management program in the summer of 1996. Mr. Lee received
      his bachelor’s degree in Industry Management from the National Taiwan Industry
      Technology Institute of Taiwan.





Mark
      L.
      Baum, Esq. (our former President and CFO) and James B. Panther, II (our former
      Secretary) both of which resigned effective as of the completion of the Share
      Exchange on January 23, 2007. In addition, Mr. Jiang Bing





In
      addition to the above, Mr. Jiang Bing was appointed as a director on January
      23,
      2007 in connection with the Share Exchange, however, he has since resigned
      as of
      May 18, 2007 due to personal reasons and not as a result of any disagreements
      with the Company on any matters. Directors serve until the next annual meeting
      and until their successors are elected and qualified.





**Employment
      Agreement Amendments**





Additionally,
      in connection with the Settlement Agreement and January 2008 Financing in
      January 2008, Messrs. Yue Pu and Clive Ng have each entered into their
      Employment Agreement Amendments which delineate the scope of services required
      from each of them for the Company and its subsidiaries, and permits mutual
      director and executive affiliations with the Company and Cablecom Holdings. The
      modifications included reducing their time commitments to the Company and its
      subsidiary and providing that once replacement executive officers have been
      hired (and in the case of Mr. Ng, assuming Mr. Pu continues in his role as
      chief
      financial officer, eliminating his executive duties and he will only continue
      as
      the Chairman and a director of China Broadband and the Company), requiring
      in
      the case of Mr. Ng that he be subject to an ongoing obligation to offer
      acquisition candidates in the stand-alone, independent broadband business to
      China Broadband in the future. In addition, Mr. Ng has waived his right to
      receive all accrued salary previously owed to him. The
      Employment Agreement Amendments were approved by the board and by the
      disinterested board members, Messrs. Zale and Grossman and was required as
      part
      of the Settlement Agreement.





Additionally,
      Mr. Ng waived his right to receive all salary compensation owed to him by the
      Company, through January 11, 2008, previously accrued but unpaid.





**Family
      Relationships**





None.





**Involvement
      in Certain Legal Proceedings** .





No
      officer or director of the Company has, during the last five years: (i) been
      convicted in or is currently subject to a pending a criminal proceeding; (ii)
      been a party to a civil proceeding of a judicial or administrative body of
      competent jurisdiction and as a result of such proceeding was or is subject
      to a
      judgment, decree or final order enjoining future violations of, or prohibiting
      or mandating activities subject to any federal or state securities or banking
      laws including, without limitation, in any way limiting involvement in any
      business activity, or finding any violation with respect to such law, nor (iii)
      has any bankruptcy petition been filed by or against the business of which
      such
      person was an executive officer or a general partner, whether at the time of
      the
      bankruptcy of for the two years prior thereto.





**Director
      Independence**





While
      the
      Company’s securities are not trading on a national securities exchange or
      NASDAQ, the Company’s Board of Directors has determined that David Zale and
      James Cassano and Jonas Grossman are independent directors under the rules
      of the American Stock Exchange Company Guide (the “AMEX Company Guide”), because
      they do not currently own a significant percentage of Company’s shares, are not
      currently employed by the Company, have not been actively involved in the
      management of the Company and do not fall into any of the enumerated categories
      of people who cannot be considered independent directors under the AMEX Company
      Guide. The Company does not have an audit committee, nominating committee or
      compensation committee and therefore the entire Board of Directors performs
      those functions for the Company. Notwithstanding the foregoing and in addition
      to the general board approvals obtained, a special board committee comprised
      of
      disinterested board members, Messrs. Zale and Grossman, ratified the Employment
      Agreement Amendments of Clive Ng and Yue Pu and the Settlement Agreement.




38




Simultaneously
      with the closing of the January 2008 Financing, and entry into the Settlement
      Agreement, Messrs. David Zale, James Cassano and Jonas Grossman were appointed
      as directors of the Company, joining Messrs. Clive Ng and Yue Pu. Prior to
      the
      appointment of Messrs. Zale, Cassano and Grossman, such persons had no
      affiliations or business relationship with the Company, except that Mr. Grossman
      was and continues to be, a partner and officer of Chardan Capital which received
      a placement agent fee of notes and warrants in connection with the January
      2008
      Financing as described above. Additionally, the board appointed Mr. Tom Lee
      as
      new Chief Executive Officer and Principal Executive Officer on January 11,
      2008.





Prior
      to
      the appointment of Messrs. Zale, Cassano and Grossman, such persons had no
      affiliations or business relationship with the Company, except that Mr. Grossman
      was and continues to be, a partner and officer of Chardan Capital which received
      a placement agent fee of notes and warrants in connection with the January
      2008
      Financing.





Effective
      as of March 13, 2008, the Company appointed Mr. Marc Urbach as President of
      the
      Company and its wholly owned subsidiary, China Broadband, Ltd.





**Family
      Relationships**





None.





**Involvement
      in Certain Legal Proceedings** .





No
      officer or director of the Company has, during the last five years: (i) been
      convicted in or is currently subject to a pending a criminal proceeding; (ii)
      been a party to a civil proceeding of a judicial or administrative body of
      competent jurisdiction and as a result of such proceeding was or is subject
      to a
      judgment, decree or final order enjoining future violations of, or prohibiting
      or mandating activities subject to any federal or state securities or banking
      laws including, without limitation, in any way limiting involvement in any
      business activity, or finding any violation with respect to such law, nor (iii)
      has any bankruptcy petition been filed by or against the business of which
      such
      person was an executive officer or a general partner, whether at the time of
      the
      bankruptcy of for the two years prior thereto.





*Employment
      Agreement with Marc Urbach***





The
      Company has entered into a formal employment agreement with Mr. Urbach pursuant
      to which Mr. Urbach has been appointed as President of the Company and its
      wholly owned Cayman Islands subsidiary, China Broadband, Ltd., pursuant to
      which
      the Company has agreed to compensate Mr. Urbach $120,000 per year, for a four
      year term, with bonuses and increases reviewed annually. See “Employment
      Agreement with Marc Urbach” below.





*Interested
      Party Transactions*





Mr.
      Jonas
      Grossman is a co-owner and officer of Chardan Capital which acted as placement
      agent in connection with the January 2008 Financing, prior to Mr. Grossman’s
      appointment to the board of directors of the Company. Chardan Capital was
      compensated the amount of $121,250 (which commission was applied by Chardan
      Capital to an investment in $121,250 principal amount of Notes and 166,667
      Class
      A Warrants in the January 2008 Financing), $10,000 cash, and 1,131,667 Broker
      Warrants, each as described more fully under the subsection titled “ Placement
      Agent Fee to Chardan Capital Markets, LLC” above . Mr. Grossman disclaims
      beneficial ownership of all but 22.5% of such securities.





**Board
      of Directors Committees**





We
      do not
      currently have a standing audit, nominating or compensation committee of the
      Board of Directors, or any committee performing similar functions. We are not
      an
      issuer listed on a national securities exchange or listed in an automated
      inter-dealer quotation system of a national securities association and therefore
      we are not required to have an audit committee. Although we hope to have an
      audit committee established at some time in the near future, we have not done
      so
      yet. Since we have not established such a committee, we have not identified
      any
      member of such a committee as a financial expert.





**Advisory
      Board**





We
      do not
      currently have an Advisory Board.




39





**Meetings
      of our Board of Directors**





Our
      Board
      of Directors took action by written consent in lieu of meeting three times
      during the 2007 fiscal year and did not hold regular meetings.





**Compliance
      with Section 16(a) of the Exchange Act**





Section 16(a)
      of the Securities Exchange Act of 1934, as amended, requires our directors,
      executive officers, and stockholders holding more than 10% of our outstanding
      common stock, to file with the Securities and Exchange Commission initial
      reports of ownership and reports of changes in beneficial ownership of our
      common stock. Executive officers, directors and greater-than-10% stockholders
      are required by SEC regulations to furnish us with copies of all
      Section 16(a) reports they file. To our knowledge, based solely on review
      of the copies of such reports furnished to us for the period ended December
      31,
      2007, the Section 16(a) reports required to be filed by our executive
      officers, directors and greater-than-10% stockholders were filed on a timely
      basis, other than Messrs . Ng, Bing and Pu and Grossman, which have all filed
      a
      Form 3 late.





**Code
      of Ethics**





To
      date,
      we have not adopted a Code of Ethics as described in Item 406 of Regulation
      S-B.
      Given our recent acquisition, we have not yet had the opportunity to adopt
      a
      code of ethics. However, we intend to adopt a code of ethics as soon as
      practicable.





**Item
      10. Executive Compensation**





**SUMMARY
      COMPENSATION TABLE**





The
      following table sets forth information concerning the total compensation that
      we
      have paid or that has accrued on behalf of our chief executive officer and
      other
      executive officers with annual compensation exceeding $100,000 during the years
      ended December 31, 2007 and 2006.




**Name
                & Principal Position**
            
            
            **Year**
            
            
            **Salary**
            
            
            **Bonus**
            
            
            **Stock Awards**
            
            
            **Option
                Awards**
            
            
            **Non-Equity
                Incentive Plan Compensation**
            
            
            **Change
                in Pension Value and Non-Qualified Deferred Compensation Earnings**
            
            
            **All
                Other Compensation**
            
            
            **Total****($)**
            
            
            **($)**
            
            
            **($)**
            
            
            **($)**
            
            
            **($)**
            
            
            **($)**
            
            
            **($)**
            
            
            **($)**Clive
                Ng, Chairman
            
            
            2007
            
            
            212,054
            (1)2006
            
            
            0Yue
                Pu, Vice Chairman
            
            
            2007
            
            
            101,786
            (2)2006Mark
                L. Baum, Former President, CFO and Director
            
            
            2007
            
            
            0
            (3)
            
            0
            
            
            —
            
            
            0
            
            
            0
            
            
            0
            
            
            0
            
            
            02006
            
            
            0
            
            
            0
            
            
            —
            
            
            0
            
            
            0
            
            
            0
            
            
            0
            
            
            0James
                Panther, II, former Director and Secretary
            
            
            2007
            
            
            0
            (3)
            
            0
            
            
            —
            
            
            0
            
            
            0
            
            
            0
            
            
            0
            
            
            02006
            
            
            0
            
            
            0
            
            
            —
            
            
            0
            
            
            0
            
            
            0
            
            
            0
            
            
            0




(1)
      Mr.
      Ng became an executive and director of the Company, simultaneously with the
      closing of our Share Exchange Agreement on January 23, 2007. Mr. Ng’s salary was
      accrued in 2007 and not paid in accordance with his employment agreement which
      provided that such salary would be paid upon a subsequent financing. Pursuant
      to
      the Settlement Agreement in January 2008, Mr.
      Ng
      discharged and waived all accrued salary owed to him by the Company, and agreed
      to accrue future salary until a financing.




40




(2)
      Mr.
      Pu became an executive and director of the Company, simultaneously with the
      closing of our Share Exchange Agreement on January 23, 2007. Mr. Pu’s salary was
      accrued in 2007 and not paid in accordance with his employment agreement and
      was
      to be paid upon a subsequent financing.




(3)
      Messers. Baum and Panther, our former director and officers, resigned from
      all
      positions with the Company simultaneously with the closing of our Share Exchange
      Agreement on January 23, 2007.





**Option
      Grants and Exercises**





**OUTSTANDING
      EQUITY AWARDS AT FISCAL YEAR-END TABLE**





The
      following table sets forth information with respect to grants of options to
      purchase our common stock to the named executive officers during the fiscal
      year
      ended December 31, 2007.




**Option
                Awards**
            
            **Stock
                Awards****Name**
            
            **Number**
              **of**
              **Securities**
              **Underlying**
              **Unexercised**
              **Options**
              **(#)**
              **Exercisable**
            
            **Number**
              **of**
              **Securities**
              **Underlying**
              **Unexercised**
              **Options**
              **(#)**
              **Unexercisable**
            
            **Equity**
              **Incentive**
              **Plan**
              **Awards:**
              **Number**
              **of**
              **Securities
                Underlying**
              **Unexercised**
              **Unearned**
              **Options**
              **(#)**
            
            **Option**
              **Exercise**
              **Price**
              **($)**
            
            **Option**
              **Expiration**
              **Date**
            
            **Number**
              **of
                Shares**
              **or
                Units**
              **of
                Stock**
              **That
                Have**
              **Not**
              **Vested**
              **(#)**
            
            **Market**
              **Value
                of**
              **Shares
                or**
              **Units
                of**
              **Stock**
              **That
                Have**
              **Not**
              **Vested**
              **($)**
            
            **Equity**
              **Incentive**
              **Plan
                Awards:**
              **Number**
              **of**
              **Unearned**
              **Shares,**
              **Units
                or**
              **Other
                Rights**
              **That
                Have**
              **Not**
              **Vested**
              **(#)**
            
            **Equity
                Incentive**
              **Plan
                Awards:**
              **Market
                or Payout**
              **Value**
              **of**
              **Unearned**
              **Shares,**
              **Units
                or**
              **Other**
              **Rights**
              **That
                Have**
              **Not**
              **Vested**
              **($)**Mark
                L. Baum, Esq.
            
            
            (1)
            
            
            0
            
            
            —
            
            
            —
            
            
            —
            
            
            —
            
            
            0
            
            
            —
            
            
            0





(1)
      2,000,000 shares of common stock were issued in November of 2006, in exchange
      for previous services rendered and a full release. In addition, 500,000 options
      to purchase our common stock at $.60 per share were issued to BCGU, LLC, an
      entity owned and controlled by both Mr. Baum and Mr. Panther, our former
      executive officers and directors prior to the Share Exchange, after December
      31,
      2006.





There
      were no other option grants or exercises by any of the executive officers named
      in the Summary Compensation Table above during 2007.





**2007
      Director Compensation**




We
      currently do not compensate our directors.





**Employment
      and Consultant Agreements**





There
      were no employment agreements or consulting agreements entered into in 2005
      or
      2006. The Company entered into a consulting agreement with Maxim Financial
      Corporation on January 23, 2007, the provisions of which are described below.
      Additionally, in connection with the Share Exchange and acquisition of the
      business acquisition, the Company entered into the employment agreements set
      forth below with Messrs. Ng and Yue, which were amended on January 11, 2008
      in
      connection with the Settlement Agreement and related financing.





*Employment
      Agreement with Marc Urbach*





On
      March
      13, 2008, the Company entered into a formal employment agreement with Mr. Urbach
      pursuant to which Mr. Urbach has been appointed as President of the Company
      and
      its wholly owned Cayman Islands subsidiary, China Broadband, Ltd., pursuant
      to
      which the Company has agreed to compensate Mr. Urbach $120,000 per year, for
      a
      four year term, with bonuses and increases reviewed annually. In addition,
      the
      Company granted Mr. Urbach options to purchase 100,000 shares common stock
      of
      the Company, exercisable in four equal annual installments commencing on the
      date of hire and on each of the first 3 anniversaries thereafter, at an exercise
      price equal to market value at the time of issuance. The employment agreement
      also provides for a discretionary bonuses and a vehicle and travel allowance
      and
      similar benefits as an executive.




41




**Consulting
      Agreement with Maxim Financial Corporation**





*Consulting
      Agreement and Lease of Office Space in Boulder Colorado*


We
        entered into a year to year lease to rent office space and facilities in
        Boulder
        Colorado from Maxim. This lease covers 1,000 square feet of office space
        and
        related services, which we primarily use as our United States corporate offices.
        The monthly lease rate is $2,000 per month. This lease may be terminated
        for any
        reason by Maxim Financial Corporation on 30 days notice. Pursuant to our
        consulting agreement with them, Maxim Financial Corporation has waived its
        past
        fees which have accrued to China Broadband Cayman since July of 2006 and
        all
        future rental fees through December 31, 2007. In addition, Maxim Financial
        Corporation has agreed to defer all monthly rental payments beginning January
        2008 until the Company’s next capital raise subsequent to January
        2008.




**Item
      11. Security Ownership of Certain Beneficial Owners and
      Management and Related Stockholder Matters**





The
      following table sets forth certain information regarding our common stock
      beneficially owned as of March 31, 2008 for (i) each shareholder we know to
      be
      the beneficial owner of 5% or more of our outstanding common stock, (ii) each
      of
      our executive officers and directors, and (iii) all executive officers and
      directors as a group. In general, a person is deemed to be a "beneficial owner"
      of a security if that person has or shares the power to vote or direct the
      voting of such security, or the power to dispose or to direct the disposition
      of
      such security. A person is also deemed to be a beneficial owner of any
      securities of which the person has the right to acquire beneficial ownership
      within 60 days. To the best of our knowledge, subject to community and martial
      property laws, all persons named have sole voting and investment power with
      respect to such shares, except as otherwise noted. At March 31, 2008, we had
      50,255,599 shares of common stock outstanding.




**Amount
                  of**
              
              **Percent
                  of****Beneficial**
              
              **Beneficial****Name
                  of Beneficial Owner**
              
              **Ownership****(1)**
              
              **Ownership****(1)**Clive
                  Ng (2)
              
              
              26,002,915
              (3)
              
              51.9
              %Marc
                  Urbach (4)
              
              
              25,000
              (4)
              
              *
              %Pu
                  Yue (5)
              
              
              -0-
              
              
              —David
                  Zale (6)
              
              
              75,000
              (6)
              
              *James
                  Cassano (7)
              
              
              -0-
              
              
              —Jonas
                  Grossman (8)
              
              
              327,375
              (9)
              
              *
              %OTHER
                  PERSONS (Non Executives etc.)Mark
                  L. Baum, Esq. (10)
              
              
              3,000,000
              (10)
              
              5.9
              %Oliveira
                  Capital, LLC
              
              
              2,893,944
              (11)
              
              5.8**All
                  directors and executive officers**
              
              
              **26,430,290**
              
              
              **52.7**
              **%**




*  Indicates
      less than 1%.




(1)  Indicates
      shares and percentages held as of March 31, 2008, based on 50,255,599 shares
      outstanding, as calculated in accordance with the above formula.





(2)  The
      address of Clive Ng is c/o China Broadband Ltd., 1900 Ninth Street, 3 rd Floor,
      Boulder, Colorado 80302.




(3)  Includes
      3,582,753 shares held by 88 Holdings, Inc., 3,250,000 held by Beeteebee
      Nominees and 19,170,162 shares
      and held by China Broadband Partners, Ltd. Mr. Ng controls and owns 100%
      beneficial ownership over these entities.




(4)  Includes
      shares issuable upon exercise of options to purchase 25,000 shares which
      are exercisable within 60 days at $.99 per share, but not options to
      purchase an additional 75,000 shares at $.99 which are not yet exercisable.
      All
      of the options were issued under the Plan.





(5)  The
      address of Pu Yue is Apartment 2001, Bld. 2 , No. 1 Xiangheyman Road, Dongcheng
      District, Beijing, China 100028.





(6)  The
      address for Mr. Zale is 825 Third Avenue, Suite 244, New York, New York 10022.
      Share amounts include 50,000 shares of common stock and 25,000 Investor Warrants
      to purchase common stock at $2.00 acquired in our January 2007 private offering.





(7)  The
      address for Mr. Cassano is 117 Graham Way, Devon, Pennsylvania,
      19333.




42




(8)  The
      address for Mr. Jonas Grossman is
      17
      State Street, Suite 1600, New York, New York 10004.


(9)  Mr.
        Grossman is an officer and part owner of Chardan Capital Markets, LLC (“Chardan
        Capital”), which received Broker Warrants in connection with its services as
        placement agent in connection with our January 2008 Financing of Notes and
        Class A Warrants and which also invested its fee into Notes and Class A
        Warrants. Mr. Grossman has shared voting and dispositive control over securities
        owned by Chardan Capital but not over securities owned by other principals
        of
        Chardan Capital. Chardan Capital or its principals own in aggregate (i) $121,250
        principal amount of Note, convertible into an aggregate of 161,667 shares,
        of
        which, Mr. Grossman disclaims beneficial ownership of $93,969 of principal
        amount of Note and 125,292 shares issuable upon conversion thereof, (ii)
        1,131,666 shares underlying Broker’s Warrants, of which, Mr. Grossman disclaims
        beneficial ownership of 877,041 shares issuable upon exercise thereof and,
        (iii)
        161,667 shares of Class
        A
        Warrants ,
        of
        which Mr. Grossman disclaims beneficial ownership of 125,292 shares issuable
        upon exercise thereof.
 
 (10)  Indicates
        shares held by BCGU, LLC which is owned and controlled by Mr. Baum and partly
        owned by Mr. Panther, our former directors and executive officers, before
        the
        closing of the Share Exchange. The address of Mark Baum is c/o 2038 Corte
        Del
        Nogal, Suite 110, Carlsbad, California 92011. Share amounts include warrants
        to
        purchase 500,000 shares exercisable at $.60 per share issued at the closing
        of
        the November 2006 offering, all of which are exercisable within 60 days of
        the
        date of the first closing of the offering.
 
 (11)  Indicates
        shares acquired from China Broadband Partners, Ltd., an entity controlled
        by
        Clive Ng, in accordance with the terms of our January 2008 Financing.


43


**Item
      12. Certain Relationships and Related Transactions, and Director
      Independence.**





**Related
      Transactions**





*Settlement
      Agreement with Management*


In
        January of 2008, and to avoid potential disputes with management, we entered
        into a Settlement Agreement with Mr. Clive Ng and Pu Yue and amended their
        employment agreements. These agreements were ratified by our entire board
        and by
        a special independent committee comprised of Mr. David Zale and Mr. Jonas
        Grossman after their appointment. Additional specific information relating
        to
        this Settlement Agreement and the related employment agreements are provided
        in
        the “Recent Developments” section of “Item 1. Description of Business.” above,
        and in the “Risk Factors” and other sections above and “Conflicts of Interest”
in this section below, the provisions of which are incorporated by reference
        herein.
 
 *Share
        Exchange Agreement with Broadband Shareholders*
 
 In
        October of 2006 we entered into a letter of intent to acquire all of the
        shares
        of China Broadband Cayman. Prior to such time none of the Broadband
        Shareholders, as principals of China Broadband Cayman, had any affiliation
        with
        the Company.
 
 Pursuant
        to the foregoing agreement, we have acquired China Broadband Cayman pursuant
        to
        the Share Exchange January 23, 2007 in exchange for assumption by us of $325,000
        7% Convertible Promissory Notes which were convertible to 2.6% of the
        outstanding common stock of the Company (currently estimated at 1,300,0000,
        based on 50,000,000 shares outstanding), the issuance of 3,582,753 shares
        of
        common stock to 88 Holdings, Inc., and 31,000,000 shares of common stock
        to
        China Broadband Partners, both of which are entities owned or controlled
        by Mr.
        Clive Ng, 1,900,000 shares of common stock to Stephen P. Cherner and 1,382,753
        shares of common stock to MVR Investment, LLC. In addition, 2,000,000 shares
        were to be issued pursuant to the Share Exchange Agreement pro rata to said
        shareholders, subject to cancellation on a share by share basis to the extent
        that greater than 6,000,000 shares were sold in our private offering. As
        a
        result of the Company closing on the maximum offering amount of 8,000,000
        shares, none of these shares will be issued. Additionally and pursuant to
        a
        separate transaction, Maxim Financial has also acquired 300,000 shares of
        common
        stock from an entity owned by our director and shareholder prior to the Share
        Exchange, Mark L. Baum.





Our
      acquisition of China Broadband Cayman was negotiated on an arms length basis
      between the principals of China Broadband Cayman and our former principal
      officer and director, Mr. Baum. There was no relationship between the parties
      prior to such transaction. Additional specific details relating to these
      transactions is provided in the “Item 1. Description of Business.” and
“Management Discussion and Plan of Operations” sections above.





**Consulting
      Agreement with Maxim Financial Corporation**





Prior
      to
      our acquisition of China Broadband Cayman, its formation and operations,
      including the expenses relating to our acquisition in China, was funded by
      Maxim
      which is one of the principal Broadband Shareholders prior to the Share
      Exchange. Maxim Financial and its principals own an aggregate of 2,200,000
      shares of common stock of which 1,900,000 were received as a result of the
      Share
      Exchange, and 200,000 shares and 100,000 warrants were acquired in the November
      2006 offering at the same price and terms as provided to all other investors.
      Since July of 2006 and through the closing date, Maxim Financial Corporation
      has
      paid the following expenses on our behalf:





·
            Maxim
                has covered the costs for two employees for purposes of providing
                administrative and accounting services for China Broadband Cayman,


·
            Maxim
                has provided lease space, for 1,000 square feet of office and related
                space at cost, the cost of which will was discharged under the terms
                of
                the consulting agreement with Maxim, and which space is still occupied
                by
                us, and


·
            Maxim
                loaned approximately $50,000 to cover legal, travel and other expenses
                relating to the acquisition and related
                transactions.





We
      have
      also entered into a consulting agreement with Maxim effective as of January
      24 th ,
      2007,
      pursuant to which, among other things:





·
            Maxim
                agreed to discharge all of China Broadband Cayman’s debt obligations to it
                under the office lease since July of 2006 and to enter into a sublease
                for
                such space, at cost, rent under which will be waived through December
                31,
                2007,


·
            Maxim
                agreed to provide consulting and office related services through
                December
                31, 2007,


·
            We
                agreed to reimburse Maxim for all past out of pocket, legal, travel
                and
                other expenses relating to the Acquisition, and


·
            We
                issued to Maxim 3,974,800 warrants, exercisable at $.60 per share,
                which
                expire on March 24, 2009, and agreed to reimburse Maxim Financial
                for all
                travel, legal, administrative and related costs relating to our
                acquisition and financial restructuring
                activities.




44




We
      believe that the entry into the office lease with Maxim and all transactions
      entered into with Maxim were at terms no less favorable to us than as otherwise
      available to us in arm’s length transactions with third parties.





**Conflicts
      of Interest**





Certain
      potential conflicts of interest are inherent in the relationships between our
      officers and directors of and us.





*Conflicts
      Relating to Officers and Directors*


A
        controlling majority of our shares are owned directly or indirectly by Clive
        Ng,
        our Chairman and President. As such, Mr. Ng will have the ability to control
        our
        business decisions and appointment or removal of all officers and directors.
        We
        have entered into a Settlement Agreement with Mr. Ng and Mr.
        Pu are
        certain of their affiliate entities, the provisions of which can be found
        under
        the “Recent Developments” subsection of “Item 1. Description of Business” above
        and in our “Item 11. Management Discussion and Analysis and Plan of Options”
above.





From
      time
      to time, one or more of our affiliates may form or hold an ownership interest
      in
      and/or manage other businesses both related and unrelated to the type of
      business that we own and operate. These persons expect to continue to form,
      hold
      an ownership interest in and/or manage additional other businesses which may
      compete with ours with respect to operations, including financing and marketing,
      management time and services and potential customers. These activities may
      give
      rise to conflicts between or among the interests of ours and our subsidiaries
      and Jinan Parent and our and other businesses with which our affiliates are
      associated. Our affiliates are in no way prohibited from undertaking such
      activities, and neither we nor our shareholders will have any right to require
      participation in such other activities.





Further,
      because we intend to transact business with some of our officers, directors
      and
      affiliates, as well as with firms in which some of our officers, directors
      or
      affiliates have a material interest, potential conflicts may arise between
      the
      respective interests of the Company and China Broadband and these related
      persons or entities. We believe that such transactions will be effected on
      terms
      at least as favorable to us as those available from unrelated third parties.





With
      respect to transactions involving real or apparent conflicts of interest, we
      have adopted policies and procedures which require that: (i) the fact of the
      relationship or interest giving rise to the potential conflict be disclosed
      or
      known to the directors who authorize or approve the transaction prior to such
      authorization or approval, (ii) the transaction be approved by a majority of
      our
      disinterested outside directors, and (iii) the transaction be fair and
      reasonable to us at the time it is authorized or approved by our directors.





**Our
      Subsidiaries** .


As
        of
        January 23, 2007, our only subsidiary is China Broadband, Ltd, a Cayman Islands
        company. China Broadband, Ltd., in turn, owns and operates our PRC based
        operating company and its subsidiaries. A complete organizational chart of
        the
        Corporation and its divisions can be found above under the “Chinese Holding
        Company Structure” subsection of “Item 1. Description of Business,”
above.




45


**Item
      13. Exhibits.**





**Exhibit**
            
            **Description**2.1
            
            Share
                  Exchange Agreement dated as of January 23, 2007 by and among the
                  Company,
                  China Broadband, Ltd. and its shareholders.Incorporated
                  by reference from Exhibit 2.1 of our Annual Report on Form 10-KSB
                  for the
                  year ended December 31, 2006 (“2006 Annual
                  Report”)).3.1
            
            Articles
                of Incorporation filed as an exhibit to our Current Report on Form
                8-K
                filed with the Commission on January 16, 2004 and incorporated herein
                by
                reference.3.2
            
            Articles
                of Amendment to Articles of Incorporation filed as an exhibit to
                our
                Quarterly Report on Form 10-QSB filed with the Commission on September
                18,
                2006 and incorporated herein by reference.3.3
            
            Articles
                of Amendment to Articles of Incorporation changing name to “China
                Broadband, Inc.” as filed with the State of Nevada as of May 4, 2007.
                (Incorporated by reference from our Definitive Information Statement
                on
                Schedule 14C filed with the Commission on April 12, 2007).3.4
            
            Bylaws
                filed as an exhibit to Amendment No. 2 to our Registration Statement
                on
                Form 10 filed with the SEC on April 6, 1992.4.1
            
            Subscription
                Agreement, dated as of January 11, 2008, between China Broadband,
                Inc.,
                and various subscribers, with respect to private issuance of aggregate
                of
                $4,971,250 principal amount of 5% Convertible Promissory Notes and
                6,628,333 Class A Warrants. (Incorporated by reference from Current
                Report
                on Form 8-K, dated January 11, 2008)4.2
            
            Form
                of 5% Convertible Promissory Note issued to investors, convertible
                at $.75
                per share and payable on January 11, 2013. (Incorporated by reference
                from
                Current Report on Form 8-K, dated January 11, 2008)4.3
            
            Form
                of 5% Convertible Promissory Note issued to investors, convertible
                at $.75
                per share and payable on January 11, 2013. (Incorporated by reference
                from
                Current Report on Form 8-K, dated January 11, 2008)10.1
            
            Form
                of Subscription Agreement by and among the Company and the investors
                named
                on the signature pages thereto. (Incorporated by reference from the
                Corporation’s Current Report on Form 8-K, dated January 23, 2007).10.2
            
            Form
                of Registration Rights Agreement dated as of January 23, 2007, as
                amended,
                by and among the Company and the investors named on the signature
                pages
                thereto. (Incorporated by reference from the Corporation’s Current Report
                on Form 8-K, dated January 23, 2007).10.3
            
            Form
                of 7% Convertible Promissory Note issued by China Broadband, Ltd.
                and
                assumed by the Company. (Incorporated by reference from the Corporation’s
                Current Report on Form 8-K, dated January 23, 2007).10.4
            
            Form
                of Warrant dated as of January 23, 2007, exercisable at $2.00 per
                share,
                issued by the Company to investors. (Incorporated by reference from
                the
                Corporation’s Current Report on Form 8-K, dated January 23, 2007).10.5
            
            Form
                of Consulting Warrant issued to issued by the Company to Maxim Financial
                Corporation, exercisable at $.60 per share. (Incorporated by reference
                from the Corporation’s Current Report on Form 8-K, dated January 23,
                2007).10.6
            
            Cooperation
                Agreement dated as of December 26, 2006 by and between China Broadband,
                Ltd. and Jianan Guangdian Jiahe Digital Television Co., Ltd. (Incorporated
                by reference from the Corporation’s Current Report on Form 8-K, dated
                January 23, 2007).10.7
            
            Employment
                Agreement dated as of January 24, 2007 by and between the Company
                and
                Clive Ng. (Incorporated by reference from the Corporation’s Current Report
                on Form 8-K, dated January 23, 2007).10.8
            
            Employment
                Agreement dated as of January 24, 2007 by and between the Company
                and
                Jiang Bing. (Incorporated by reference from the Corporation’s Current
                Report on Form 8-K, dated January 23, 2007).10.9
            
            Employment
                Agreement dated as of January 24, 2007 by and between the Company
                and Yue
                Pu. (Incorporated by regerence from the Corporation’s Current Report on
                Form 8-K, dated January 23, 2007).




46




10.10
            
            Form
                  of Common Stock Purchase Warrant exercisable at $0.60 issued by
                  the
                  Company to BCGU, LLC in connection with Share Exchange, incorporated
                  from
                  the Corporation’s Current.* (Incorporated by reference from the
                  Corporation’s 2006 Annual Report).10.11
            
            Consulting
                Assessment, between the Company and Maxim Financial Corporation,
                dated
                January 24, 2007. (Incorporated by reference from the Corporation’s
                Current Report on Form 8-k/A dated January 23, 2007, as filed June
                4,
                2007).10.12
            
            Exclusive
                  Service Agreement dated December 2006. (Incorporated by reference
                  from the
                  Corporation’s Current Report on Form 8-K, dated April 1,
                  2007).10.13
            
            Settlement
                Agreement dated January 11, 2008, by and among China Broadband, Inc.,
                China Broadband Ltd., Stephen Cherner, Maxim Financial Corporation,
                Mark
                L. Baum, BCGU, LLC, Mark I. Lev, Wellfleet Partners, Inc., Yue Pu,
                Clive
                Ng, Chardan Capital Markets, LLC, Jaguar Acquisition Corporation,
                and
                China Cablecom Holdings, Ltd. (Incorporated by reference from the
                Corporation’s Current Report on Form 8-K, dated January 11, 2008)10.14
            
            Employment
                Agreement Amendment, dated Janaury 11, 2008, amending employment
                agreement
                of Clive Ng. (Incorporated by reference from the Corporation’s Current
                Report on Form 8-K, dated January 11, 2008)10.15
            
            Employment
                Agreement Amendment, dated Janaury 11, 2008, amending employment
                agreement
                of Yue Pu. (Incorporated by reference from the Corporation’s Current
                Report on Form 8-K, dated January 11, 2008)10.16
            
            Funds
                Escrow Agreement by and among the Company, Grushko and Mittman, P.C.,
                and
                investors. (Incorporated by reference from the Corporation’s Current
                Report on Form 8-K, dated January 11, 2008)10.17
            
            Form
                of Class A Warrants issued to investors, exercisable at $.60 per
                share and
                expiring on June 11, 2013. (Incorporated by reference from the
                Corporation’s Current Report on Form 8-K, dated January 11, 2008)10.18
            
            Broker
                Warrant issued to Chardan Capital Markets, LLC, to purchase 1,131,667
                shares of Common Stock, at an exercise price of $.50 per share, expiring
                on June 11, 2013. (Incorporated by reference from the Corporation’s
                Current Report on Form 8-K, dated January 11, 2008)10.19
            
            Cooperation
                Agreement, dated March 7, 2008, by and among Ji’Nan Zhongkuan Dian Guang
                Information Technology Co., Shandong Broadcast & TV Weekly Press and
                Modern Movie & TV Biweekly Press. (Incorporated by reference from the
                Corporation’s Current Report on Form 8-K, dated March 7, 2008)10.20
            
            Employment
                Agreement, dated as of March 13, 2008, between China Broadband, Inc.
                and
                Marc Urbach. (Incorporated by reference from the Corporation’s Current
                Report on Form 8-K, dated March 7, 2008)31.1
            
            Certification
                by Chief Executive Officer and Principal Executive Officer pursuant
                to
                Sarbanes Oxley Section 302.*31.2
            
            Certification
                by Chief Financial Officer and Principal Accountant Officer/Principal
                Financial Officer pursuant to Sarbanes Oxley Section
                302.*32.1
            
            Certification
                by Chief Executive Officer and Interim Chief Financial Officer pursuant
                to
                18 U.S.C. Section 1350.*32.2
            
            Certification
                by Chief Financial Officer and Principal Accountant Officer/Principal
                Financial Officer pursuant to 18 U.S.C. Section 1350.*99.1
            
            China
                Broadband, Inc. 2008 Stock Incentive Plan. (Incorporated by reference
                from
                the Corporation’s Current Report on Form 8-K, dated March 7,
                2008)





*
      Filed
      herewith.





**Item
      14. Principal Accountant Fees and Services.**





**Appointment
      of Auditors**





Our
      Board
      of Directors selected UHY, LLP as our auditors for the year ended December
      31,
      2007.




47




**Audit
      Fees**





UHY,
      LLP
      Certified Public Accountants, billed us $165,000 in fees for our annual audit
      for the year ended December 31, 2007. Change G Park, our previous auditors
      billed $6,000.00 for audit fee.





**Audit-Related
      Fees**





We
      did
      not pay any fees to UHY, LLP for assurance and related services that are not
      reported under Audit Fees above, during our fiscal years ending December 31,
      2007 and December 31, 2006.





**Tax
      and All Other Fees**





We
      did
      not pay any fees to UHY, LLP Certified Public Accountants, for tax compliance,
      tax advice, tax planning or other work during our fiscal years ending December

      31, 2007 and December 31, 2006.





**Pre-Approval
      Policies and Procedures**





We
      have
      implemented pre-approval policies and procedures related to the provision of
      audit and non-audit services. Under these procedures, our board of directors
      pre-approves all services to be provided by UHY, LLP Certified Public
      Accountants and the estimated fees related to these services.





With
      respect to the audit of our financial statements as of December 31, 2007, and
      for the year then ended, none of the hours expended on UHY, LLP Certified Public
      Accountants, engagement to audit those financial statements were attributed
      to
      work by persons other than UHY, LLP Certified Public Accountants, full-time,
      permanent employees.


48


**SIGNATURES**





Pursuant
      to the requirements of Section 13 or 15(d) of the Exchange Act, the registrant
      has duly caused this report to be signed on its behalf by the undersigned on
      April 14, 2008, thereunto duly authorized.


**CHINA
                BROADBAND, INC**By:
            /s/
                Marc UrbachName:
                Marc Urbach
              Title:
                President (Principal Executive Officer)





Pursuant
      to the requirements of the Securities Exchange Act of 1934, as amended, this
      report has been signed below by the following persons on behalf of the
      registrant and in the capacities indicated.





**Signatures**
            
            **Title**
            
            **Date***/s/
                Marc Urbach*
            
            President
                (Principal Executive Officer)
            
            April
                14, 2008Marc
                  Urbach*/s/
                Yue Pu*
            
            Vice
                Chairman of China Broadband, Ltd.
            
            April
                14, 2008Yue
                  Pu
            
            and
                China Broadband, Inc., and Principal Accounting Officer and Principal
                Financial Officer and Director*/s/
                Clive Ng*
            
            Chairman,
                Director
            
            April
                14, 2008Clive
                  NgDirector
            
            April
                14, 2008James
                  Cassano*/s/
                David Zale*
            
            Director
            
            April
                14, 2008David
                  Zale*/s/
                Jonas Grossman*
            
            Director
            
            April
                14, 2008Jonas
                  Grossman




49




**CHINA
      BROADBAND, INC.**





**INDEX
      TO CONSOLIDATED FINANCIAL STATEMENTS**




PageReport
                    of Independent Registered Public Accounting Firm
                
                
                F-1Consolidated
                    Financial Statements:Balance
                    Sheets as of December 31, 2007 and 2006
                
                
                F-2Statements
                    of Operations for the years ended December 31, 2007 and
                    2006
                
                
                F-3Statements
                    of Shareholders’ Equity for the years ended December 31, 2007 and
                    2006
                
                
                F-4Statements
                    of Cash Flows for the years ended December 31, 2007 and
                    2006
                
                
                F-5Notes
                    to Consolidated Financial Statements
                
                
                F-6-F-17




50




**REPORT
      OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM**




To
      the
      Board of Directors and Shareholders of China Broadband, Inc.




We
      have
      audited the accompanying consolidated balance sheets of China Broadband, Inc.
      and subsidiary (the Company) as of December 31, 2007 and 2006, and the related
      consolidated statements of operations and changes in shareholders’ equity and
      cash flows for the years then ended. 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 audits.




We
      conducted our audits in accordance with the auditing 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 audits include 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 controls 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 Broadband, Inc. and
      subsidiary as of December 31, 2007 and 2006, and the results of their operations
      and their cash flows for the years then ended in conformity with accounting
      principles generally accepted in the United States of America.


The
        accompanying consolidated financial statements have been prepared assuming
        that
        the Company will continue as a going concern. As discussed in Note 3 to the
        financial statements, in 2007 the Company suffered a significant net loss,
        generated negative cash flows from operations and is dependent upon obtaining
        additional financing to meet its obligations. These factors raise substantial
        doubt about its ability to continue as a going concern. Management's plans
        in
        regard to these matters are also described in Note 3. The financial statements
        do not include any adjustments that might result from the outcome of this
        uncertainty.




/s/ UHY
              LLPUHY
                LLPApril
                14, 2008
              Albany,
                  NY




F-1





**CHINA
      BROADBAND, INC.**


**CONSOLIDATED
      BALANCE SHEETS**


**December
      31, 2007 and 2006**





2007
            
            2006**Assets**Current
                assets:Cash
            
            $
            472,670
            
            $
            103,170Accounts
                receivable
            
            
            136,655
            
            
            -Inventory
            
            
            642,313
            
            
            -Prepaid
                expenses
            
            
            14,781
            
            
            -Other
                current assets
            
            
            73,947
            
            
            -Total
                current assets
            
            
            1,340,366
            
            
            103,170Property
                and equipment, net
            
            
            10,333,105
            
            
            -Intangible
                asset and other
            
            
            670,478
            
            
            103,652Total
                assets
            
            $
            12,343,949
            
            $
            206,822**Liabilities
                and Shareholders' Equity**Current
                liabilities:Accounts
                payable
            
            $
            835,257
            
            $
            -Accrued
                expenses
            
            
            554,073
            
            
            6,762Convertible
                notes payable
            
            
            -
            
            
            325,000Payable
                to Jinan Parent
            
            
            3,308,443
            
            
            -Other
                current liabilities
            
            
            25,905
            
            
            -Total
                current liabilities
            
            
            4,723,678
            
            
            331,762Deferred
                tax liability
            
            
            124,082
            
            
            -Total
                liabilities
            
            
            4,847,760
            
            
            331,762Minority
                interest in Jinan Broadband
            
            
            4,960,601
            
            
            -Common
                shares to be issued
            
            
            410,053
            
            
            -Commitments
                and contingenciesShareholders'
                equity:Preferred
                stock $.001 par value; 5,000,000 shares authorized,no
                shares issued and outstanding
            
            
            -
            
            
            -Common
                stock $.001 par value; 95,000,000 shares authorized,50,048,000
                and 534,494 issued and outstanding
            
            
            50,048
            
            
            535Additional
                paid-in capital
            
            
            10,485,874
            
            
            6,705,918Accumulated
                deficit
            
            
            (8,808,146
            )
            
            (6,831,393
            )Accumulated
                other comprehensive income
            
            
            397,759
            
            
            -Total
                shareholders' equity
            
            
            2,125,535
            
            
            (124,940
            )Total
                liabilities and shareholders' equity
            
            $
            12,343,949
            
            $
            206,822





See
      notes
      to consolidated financial statements.


F-2





**CHINA
      BROADBAND, INC.**


**CONSOLIDATED
      STATEMENTS OF OPERATIONS**


**Years
      Ended December 31, 2007 and 2006**





2007
            
            2006Revenue
            
            $
            3,004,092
            
            $
            -Cost
                of revenue
            
            
            1,657,979
            
            
            -Gross
                profit
            
            
            1,346,113
            
            
            -Selling,
                general and administrative expenses
            
            
            980,505
            
            
            116,073Professional
                Fees
            
            
            628,490
            
            
            52,105Depreciation
            
            
            1,718,307
            
            
            -Loss
                from operations
            
            
            (1,981,189
            )
            
            (168,178
            )Interest
                and other income (expense), net
            
            
            (404,555
            )
            
            (6,762
            )Loss
                before minority interest
            
            
            (2,385,744
            )
            
            (174,940
            )Minority
                interest loss in Jinan Broadband
            
            
            358,923
            
            
            -Loss
                before income taxes
            
            
            (2,026,821
            )
            
            (174,940
            )Income
                tax benefit
            
            
            (50,068
            )
            
            -Net
                loss
            
            $
            (1,976,753
            )
            $
            (174,940
            )Net
                loss per share:Basic
            
            $
            (0.04
            )
            $
            (0.30
            )Diluted
            
            $
            (0.04
            )
            $
            (0.30
            )Weighted
                average shares outstandingBasic
            
            
            46,504,812
            
            
            584,494Diluted
            
            
            46,504,812
            
            
            584,494




See
      notes
      to consolidated financial statements.


F-3





**CHINA
      BROADBAND, INC.**


**CONSOLIDATED
      STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY**


**Years
      Ended December 31, 2007 and 2006**





Additional
            
            
            
            OtherCommon
            
            Par
            
            Paid-in
            
            Accumulated
            
            Comprehensive
            
            ComprehensiveShares
            
            Value
            
            Capital
            
            Deficit
            
            Income
                (loss)
            
            Income
                (loss)
            
            TotalBalance
                December 31, 2005
            
            
            534,494
            
            $
            535
            
            $
            6,705,918
            
            $
            (6,706,453
            )
            $
            -
            
            $
            -
            
            $
            -Subsidiary
                shares issued for services
            
            
            
            
            
            
            
            
            
            
            
            50,000
            
            
            
            
            
            
            
            
            50,000Net
                loss
            
            
            
            
            
            
            
            
            
            
            
            (174,940
            )
            
            
            
            
            
            
            
            (174,940
            )Balance
                December 31, 2006
            
            
            534,494
            
            
            535
            
            
            6,705,918
            
            
            (6,831,393
            )
            
            -
            
            
            -
            
            
            (124,940
            )Shares
                issued for services
            
            
            2,300,000
            
            
            2,300
            
            
            26,321
            
            
            
            
            
            
            
            
            
            
            
            28,621Shares
                issued for share exchange
            
            
            37,865,506
            
            
            37,865
            
            
            (37,865
            )
            
            
            
            
            
            
            
            
            
            
            -Shares
                  issued upon conversion of Convertible Promissory
                  Notes
            
            
            1,348,000
            
            
            1,348
            
            
            227,200
            
            
            
            
            
            
            
            
            
            
            
            228,548Shares
                issued in private placement offering
            
            
            8,000,000
            
            
            8,000
            
            
            3,992,000
            
            
            
            
            
            
            
            
            
            
            
            4,000,000Debt
                    issuance cost associated with private placement offering and
                    conversion of
                    Convertible Promissory Notes
            
            
            
            
            
            
            
            
            (427,700
            )
            
            
            
            
            
            
            
            
            
            
            (427,700
            )Net
                loss
            
            
            
            
            
            
            
            
            
            
            
            (1,976,753
            )
            
            
            
            
            (1,976,753
            )
            
            (1,976,753
            )Translation
                adjustment
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            397,759
            
            
            397,759
            
            
            397,759Comprehensive
                loss
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            $
            (1,578,994
            )Balance
                December 31, 2007
            
            
            50,048,000
            
            $
            50,048
            
            $
            10,485,874
            
            $
            (8,808,146
            )
            $
            397,759
            
            
            
            
            $
            2,125,535




See
      notes
      to consolidated financial statements.




F-4


**CHINA
      BROADBAND, INC.**


**CONSOLIDATED
      STATEMENTS OF CASH FLOWS**


**Years
      Ended December 31, 2007 and 2006**




2007
            
            2006Cash
                flows from operating activities:Net
                loss
            
            $
            (1,976,753
            )
            $
            (174,940
            )Adjustments
                to reconcile net loss to netcash
                provided by operating activities:Stock
                compensation expense
            
            
            438,674
            
            
            50,000Depreciation
                and amortization
            
            
            1,744,430
            
            
            -Deferred
                income tax (benefit)
            
            
            (50,068
            )
            
            -Change
                in assets and liabilities, net ofeffects
                of Jinan Broadband acquisition:Accounts
                receivable
            
            
            442,640
            
            
            -Inventory
            
            
            667,357
            
            
            -Prepaid
                expenses and other assets
            
            
            (88,728
            )
            
            -Accounts
                payable and accrued expenses
            
            
            247,454
            
            
            6,763Net
                cash provided by (used in) operating activities
            
            
            1,425,066
            
            
            (118,177
            )Cash
                flows from investing activities:Acquisition
                of property and equipment
            
            
            (2,443,055
            )
            
            -Net
                cash used in investing activities
            
            
            (2,443,055
            )
            
            -Cash
                flows from financing activities:Proceeds
                from convertible notes payable
            
            
            -
            
            
            325,000Proceeds
                from private placement offering
            
            
            4,000,000
            
            
            -Issuance
                costs associated with privateplacement
                and convertible notes
            
            
            (420,500
            )
            
            -Payable
                to Jinan Parent
            
            
            (2,228,203
            )
            
            (103,653
            )Net
                cash provided by financing activities
            
            
            1,351,297
            
            
            221,347Effect
                of exchange rates changes on cash
            
            
            36,252
            
            
            -Net
                increase in cash
            
            
            369,500
            
            
            103,170Cash
                at beginning of period
            
            
            103,170
            
            
            -Cash
                at end of period
            
            $
            472,670
            
            $
            103,170Supplemental
                Cash Flow Information:Cash
                paid for interest
            
            $
            10,490
            
            $
            -Notes
                payable converted to common stock
            
            $
            325,000
            
            $
            -Ordinary
                shares issued in exchange for formationcosts
                by founding shareholders
            
            $
            -
            
            $
            50,000Acquisition
                of Jinan Broadband:Fair
                value of assets acquired
            
            $
            11,497,317
            
            $
            -Liabilities
                assumed
            
            $
            1,164,936
            
            $
            -Consideration
                paid:Cash
                paid
            
            $
            5,772,125
            
            $
            -Minority
                interest
            
            $
            5,319,524
            
            $
            -




See
      notes
      to consolidated financial statements.


F-5




**CHINA
      BROADBAND, INC. AND SUBSIDIARIES**





**NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS**




**1.**  **Organization,
      Description of Business and Basis of Presentation**




**General**





China
      Broadband, Inc., a Nevada corporation, was formed on October 22, 2004 pursuant
      to a reorganization of a California entity formed in 1988. We acquired China
      Broadband, Ltd., a Cayman Islands company (“China Broadband Cayman”) which had
      existing PRC based operations in the cable broadband internet business on
      January 23, 2007, and effective May 24, 2007 changed our name from Alpha Nutra,
      Inc. to China Broadband, Inc.


We
        own
        and operate, through our indirect subsidiary in the PRC, a cable broadband
        business based in the Jinan region of China. In early 2008, we executed
        definitive agreements to acquire and have tendered our initial required payments
        for, a newspaper and periodical television programming guide business in
        the
        Shandong region of China (See
        Note
        11).


The
      Company was organized in 1988 under the name “TJB Enterprises, Inc.” as a blind
      pool/blank check company formed for the purpose of seeking a merger with a
      private operating company. We operated various businesses and underwent various
      reorganizations and bankruptcy from inception through June of 2005. From July
      1,
      2005 we operated as a blank check company under the name Alpha Nutra, Inc.
      in
      search of a business acquisition.





**Share
      Exchange**





**Acquisition
      of China Broadband Cayman**


On
        January 23, 2007, pursuant to the terms of the Share Exchange Agreement,
        we
        acquired 100% of the outstanding capital stock of China Broadband Cayman
        from
        it’s four shareholders in exchange for 37,865,506 shares of common stock,
        appointed new management and assumed the obligations of China Broadband Cayman
        under $325,000 principal amount of 7% Convertible Promissory Notes, which
        were
        convertible into 1,300,000 shares of our common stock, as well as other related
        obligations. At the time of this transaction, China Broadband Cayman was
        a party
        to a Cooperation Agreement to acquire our existing business, a Jinan based
        cable internet provider. (See “Acquisition of Jinan Broadband” in this section,
        below)
 
 Simultaneously
        with the closing of our acquisition of China Broadband Cayman, we consummated
        a
        financing of $4,000,000 of Units consisting of an aggregate of 8,000,000
        shares
        of common stock and 4,000,000 warrants to purchase common stock.
 
 Effective
        as of the closing date of the Share Exchange on January 23, 2007, new members
        of
        management were appointed to the Board and as executive officers, and our
        then
        existing officers and directors, Mark L. Baum and James B. Panther, II, resigned
        from all officer and director positions with the Company.


The
      material terms of the Share Exchange Agreement with China Broadband Cayman
      and
      its shareholders are:





·
            We
                acquired all of the shares of China Broadband Cayman from its four
                shareholders (the “Broadband Shareholders”) in exchange for 37,865,506
                shares of our common stock, resulting in China Broadband Cayman becoming
                our wholly owned subsidiary and its Broadband Shareholders owning
                over 78%
                of our common stock,





·
            We
                funded, with the proceeds of our simultaneous equity offering, the
                first
                of two payments of the acquisition of the 51% interest in Jinan Broadband
                of approximately $2,572,125 including expenses, the second payment
                of
                which was made in March 2008,





·
            We
                ssumed liabilities of China Broadband Cayman under the $325,000 principal
                amount of 7% Convertible Promissory Notes, which were convertible
                at $.25
                per share of our common stock for an aggregate of 1,300,000 shares
                and to
                pay interest thereon, all of which have since been converted as of
                February 28, 2007, with interest paid in cash through such
                date,





·
            We
                assumed certain obligations of China Broadband Cayman to issue, and
                have
                so issued, 48,000 shares to WestPark Capital, Inc., which acted as
                placement agent for China Broadband Cayman in connection with placement
                agent services rendered by it relating to the sale of its 7% Convertible
                Promissory Notes, in 2006,





·
            We
                  agreed to assume obligations of China Broadband Cayman under its
                  registration rights agreement, to register all shares issued upon
                  conversion of the 7% Convertible Promissory Notes and the 48,000
                  shares issued to WestPark Capital, Inc. As these shares were not
                  registered, we were required to issue 170,855 shares as a penalty
                  to said
                  shareholders and recorded an expense of $410,053 related to this
                  issuance
                  during 2007. These shares are classified as Common shares to be
                  issued on
                  the accompanying Balance Sheet and were issued in March
                  2008.






F-6


·
            We
                issued 500,000 warrants to BCGU, LLC, an entity beneficially owned
                by Mark
                L. Baum, our outgoing director, executive officer and former principal
                shareholder, as consideration for professional and related services
                rendered, which warrants are exercisable at $.60 and expire on March
                24,
                2009 (which has been extended after December 31, 2007),  ·
            We
                agreed to a “leak out” agreement with respect to the Exchange Shares and
                with respect to shares held beneficially by Mr. Baum, our outgoing
                executive officer and director and the four Broadband Shareholders,
                which
                leak out agreement has since been terminated so as to facilitate
                our
                convertible debt financing in January 2008,





·
            We
                issued 3,974,800 warrants exercisable at $.60 per share with an expiration
                date of March 24, 2009 (which has been extended after December 31,
                2007)
                to Maxim Financial Corporation as a consulting fee and in exchange
                for
                funding operating and other business activities of China Broadband
                Cayman
                prior to the Share Exchange and in exchange for entering into a pass
                through lease with us and waiving past and future rent through December
                2007 under such lease,





·
            We
                entered into employment agreements with certain new members of management
                in connection with our operations in China, which employment agreements
                have since been modified.




**Simultaneous
      Closing of Equity Financing**


Simultaneously
        with the closing of our acquisition of China Broadband Cayman, and as a
        necessary condition thereto in order to fund our first payment for the
        acquisition of the broadband business in China, we conducted the first closing
        of our private offering pursuant to which we entered into subscription
        agreements with investors for the sale of 6,000,000 shares of common stock
        and
        3,000,000 Redeemable Common Stock Purchase Warrants, exercisable at $2.00
        per
        share (the “Investor Warrants”). This offering was conducted through WestPark
        Capital, Inc. as placement agent, on a “best efforts, $3,000,000 minimum,
        $4,000,000 maximum” basis. During the six months ended June 30, 2007 we raised
        an additional $1,000,000 such that we sold the aggregate maximum of $4,000,000
        in this offering consisting of an aggregate of 8,000,000 shares and 4,000,000
        warrants to accredited investors. Placement fees and expenses paid during
        the
        year ended December 31, 2007 in connection with the offering were approximately
        $420,500.
 
 We
        used
        $2,572,125 of the proceeds of this offering from the first closing to pay
        the
        first installment plus expenses of our acquisition of a 51% interest in the
        China based broadband cable internet business
        spun off by Jinan Parent. This business acquisition is our only operating
        business as of December 31, 2007. We granted the investors registration rights
        in connection with this offering and compensated WestPark Capital, Inc.,
        our
        placement agent, with a placement agent fee consisting of $320,000 plus
        expenses, and issued to them 640,000 warrants to purchase common stock at
        $.60
        per share.
 
 **Acquisition
        of Jinan Broadband**
 
 At
        the
        time of the closing of the Share Exchange Agreement, China Broadband Cayman
        was
        a party to a Cooperation Agreement (the “Cooperation Agreement”) with Jian
        Guangdian Jiahe Digital Television Co., Ltd. (“Jinan Parent”) to acquire a 51%
        controlling interest in an operating broadband cable internet company
        based in the City of Jinan in the Shandong Region of China, sometimes referred
        to herein as “Jinan Broadband.” The Cooperation Agreement provides that the
        operating business’ operations and pre-tax revenues would be assigned to our
        Jinan Broadband subsidiary for 20 years, effectively providing for an
        acquisition of the business. We paid $2,550,000 from proceeds of the first
        closing of our private offering in January 2007 for payment to Jinan Parent
        in
        exchange for ownership by our China based Wholly Foreign Owned Entity
        (“WFOE”) of 51% interest in Jinan Broadband and entry into the Exclusive
        Cooperation Agreement and an Exclusive Service Agreement. This acquisition
        was
        completed in late March of 2007 with an effective transfer of assets date
        of
        April 1, 2007, even though we commenced certain operations of this entity
        prior
        to such time. In consideration for this 20 year business and management rights
        we paid approximately $2,572,000, including expenses, in March 2007 and were
        required to pay an additional approximate 23 million RMB. This payment was
        made
        in March 2008 in the amount of $3.2 million.
 
 In
        addition, we entered into various agreements that relate to our revenue sharing
        obligations and management rights of this business. Moreover, Jinan Broadband
        entered into an Exclusive Service Agreement with Jinan Radio & Television
        Network, the only cable TV operator in Jinan, the capital city of Shandong,
        and
        Jinan Parent. Pursuant to the Exclusive Service Agreement, the parties will
        cooperate and provide each other with technical services related to their
        respective broadband, cable and i nternet content-based businesses with the payment of service fees to each other.
        This
        business is our only operating business since April of 2007.
  In
        addition, we entered into various agreements that relate to our revenue sharing
        obligations and management rights of this business. Moreover, Jinan Broadband
        entered into an Exclusive Service Agreement with Jinan Radio & Television
        Network, the only cable TV operator in Jinan, the capital city of Shandong,
        and
        Jinan Parent. Pursuant to the Exclusive Service Agreement, the parties will
        cooperate and provide each other with technical services related to their
        respective broadband, cable and i nternet content-based businesses with the payment of service fees to each other.
        This
        business is our only operating business since April, 2007.


The
      general business terms of this acquisition are, in relevant part, as follows:




·
            We
                received a business license from the local Industry and Commerce
                Bureau,
                that enabled us to complete the acquisition and operate the business
                of
                Jinan Broadband,




F-7


·
            Our
                WFOE, which is wholly owned by our China Broadband Cayman subsidiary,
                owns
                the 51% interest in Jinan Broadband with the seller of this business,
                Jinan Parent, owning the remaining 49% and maintaining certain control
                under the Exclusive Cooperation Agreement,




·
            Jinan
                Parent, Jinan Broadband and Jinan Radio and Television Networks Center,
                entered into the Cooperation Agreement providing for the management
                terms
                and rights and revenue sharing rights between us and Jinan
                Parent,




·
            Jinan
                Broadband entered into an Exclusive Service Agreement with Jinan
                Radio and
                Television Network and Jinan Parent pursuant to which the parties
                will
                cooperate and provide each other with technical services related
                to their
                respective broadband, cable and Internet content-based businesses
                with the
                payment of service fees to each other.




Pursuant
      to the acquisition agreement, the fair value of Jinan Broadband was determined
      on the effective date of April 1, 2007 to be approximately $10.9 million
      (approximately 83.9 million RMB based on exchange rates at the time). Jinan
      Parent was to contribute its operating assets to Jinan Broadband and we were
      to
      contribute our 51% ownership interest of the approximate $10.9 million (83.9
      million RMB) equity value or approximately $5.5 million (approximately 42.8
      million RMB based on exchange rates at the time). The total value of the net
      assets contributed by Jinan Parent totaled approximately $10.4 million (79.9
      million RMB) resulting in an after-tax long term intangible asset of
      approximately $0.7 million (4 million RMB based on exchange rates at the time).


As
        of
        December 31, 2007, we contributed approximately $2.6 million (19.8 million
        RMB
        based on exchange rates at the time) to Jinan Broadband. We were required
        to
        make a second payment of approximately $3.2 million (approximately 23 million
        RMB based on current exchange rates) by January 2008. We
        made
        the second and last payment for Jinan Broadband in March of 2008 and incurred
        no
        penalty for making this payment in March.
 
 On
        the
        effective date Jinan Parent maintained approximately $2.6 million (19.8 million
        RMB based on exchange rates at the time) contributed by us resulting in a
        payable of approximately $5.5 million (42.8 million RMB based on exchange
        rates
        at the time) due to Jinan Parent. During the year ended December 31, 2007,
        Jinan
        Broadband paid approximately $2.8 million (approximately 18.6 million RMB
        based
        on exchange rates at the times) to Jinan Parent resulting in a net payable
        due
        Jinan Parent of approximately $3.3 million (approximately 24.2 million RMB)
        as
        of December 31, 2007.
  **Basis
        of Presentation**
 
 China
        Broadband, Inc. and its subsidiaries (“China Broadband, Inc. ”,
“we,”
        “us,” or “the Company”) operate in a single segment. The principal activities of
        the Company are to provide cable and wireless broadband services, principally internet services, Internet Protocol
        Point wholesale services, related network equipment rental and sales, and
        fiber
        network construction and maintenance.




The
      transactions relating to our acquisition of China Broadband Cayman (and its
      PRC
      based subsidiary) has been accounted for as a reverse acquisition of Alpha
      Nutra, Inc. with China Broadband Cayman as the accounting acquirer, with no
      adjustment to the historical basis of the assets and liabilities of China
      Broadband Cayman, and the operations were consolidated as though the
      transactions occurred as of the beginning of the first accounting period
      presented in the accompanying consolidated financial statements.





**2.**    **Summary
      of Significant Accounting Policies**





a)
            Principles
                of Consolidation





The
      consolidated financial statements include the accounts of the China Broadband,
      Inc. and its wholly-owned subsidiary, China Broadband Cayman, and its PRC based
      subsidiary(i.e. our WOFE) which owns Jinan Broadband. All material intercompany
      transactions and balances are eliminated in consolidation.





b)**
            Accounting
                Method





The
      Company's policy is to use the accrual method of accounting to prepare and
      present financial statements, which conform to generally accepted accounting
      principles in the United States.





c)**
            Estimates





The
      preparation of financial statements in conformity with generally accepted
      accounting principles requires management to make estimates and assumptions
      that
      affect the reported amounts of assets and liabilities and disclosure of
      contingent assets and liabilities at the date of the financial statements and
      the reported amounts of revenues and expenses during the reporting period.
      Actual results could differ from those estimates.




F-8





d)**
            Accounts
                Receivable




Accounts
      receivable are recorded at the invoiced amount after deduction of trade
      discounts, business tax and allowance. The Company considers accounts receivable
      to be fully collectible; accordingly, no allowance for doubtful accounts has
      been established.





e)
            Inventory





Inventories,
      consisting of cables, fiber, connecting material, power supplies and spare
      parts
      are stated at the lower of cost or market value. Cost is determined using the
      first-in, first-out (FIFO) method. Inventory of $642,313 and $0 as of
      December 31, 2007 and 2006, respectively, consisted of raw material, parts
      and
      accessories.




f)**
            Property
                and Equipment





Property
      and equipment are stated at cost less accumulated depreciation. Expenditures
      for
      major renewals and betterments, which extend the original estimated economic
      useful lives or applicable assets, are capitalized. Expenditures for normal
      repairs and maintenance are charged to expense as incurred. The costs and
      related accumulated depreciation of assets sold or retired are removed from
      the
      accounts, any gain or loss thereon is reflected in operations.





Depreciation
      is provided for on the straight line basis over the estimated useful lives
      of
      the respective assets over a period of five years. Depreciation expense amounted
      to $1,718,307 and $0, during the years ended December 31, 2007 and 2006,
      respectively.





g)
            Impairment
                of Long-Lived Assets





Long-lived
      assets, including property and equipment, are reviewed for impairment whenever
      events or changes in circumstances indicate that the carrying amount of an
      asset
      may not be recoverable. Recoverability of assets to be held and used is measured
      by a comparison of the carrying amount of an asset to the estimated undiscounted
      future cash flows expected to be generated by the asset. If the carrying amount
      of an asset exceeds its estimated future cash flows, an impairment charge is
      recognized by the amount by which the carrying amount of the asset exceeds
      the
      fair value of the assets.





Assets
      to
      be disposed of are separately presented in the balance sheet and reported at
      the
      lower of the carrying amount or fair value less costs to sell, and are no longer
      depreciated. The assets and liabilities of a disposed group classified as held
      for sale are presented separately in the appropriate asset and liability
      sections of the balance sheet.





h)
            Intangible
                Asset





In
      July
      2001, the Financial Accounting Standards Board (“FASB”) issued SFAS No. 142,
“Goodwill and Other Intangible Assets” (“SFAS No. 142”). SFAS No. 142 requires
      that goodwill and intangible assets with indefinite useful lives no longer
      be
      amortized, but instead be tested for impairment at least annually. This
      pronouncement also requires that intangible assets with estimable useful lives
      be amortized over their respective estimated useful lives and reviewed for
      impairment in accordance with SFAS No. 144, “Accounting for the Impairment or
      Disposal of Long-Lived Assets.”





In
      accordance with SFAS No. 142, goodwill is allocated to reporting units, which
      are either the operating segment or one reporting level below the operating
      segment. We have determined that our reporting unit for purposes of applying
      the
      provisions of SFAS No. 142 is our operating subsidiary Jinan Broadband.





On
      an
      annual basis, we test goodwill and other indefinite life intangible assets
      for
      impairment. To determine the fair value of these intangible assets, there are
      many assumptions and estimates used that directly impact the results of the
      testing. In making these assumptions and estimates, we will use set criteria
      that are reviewed and approved by various levels of management, and we will
      estimate the fair value of our reporting units by using discounted cash flow
      analyses.


As
        of
        December 31, 2007 we had no goodwill and our only intangible asset relates
        to
        the fair value of the service agreement from our Jinan Broadband subsidiary
        acquisition. In accordance with SFAS No. 142, the Company is amortizing this
        service agreement over the 20 year term of this agreement, resulting in a
        recorded amortization expense of $26,123 during the year ended December 31,
        2007.





The
      following table outlines the amortization expense for the next five years and
      thereafter:





2008
            
            $
            34,8302009
            
            
            34,8302010
            
            
            34,8302011
            
            
            34,8302012
            
            
            34,830Thereafter
            
            
            496,328Total
            
            $
            670,478





F-9


i)**
            Income
                Taxes





In
      June
      2006, the FASB issued Interpretation No. 48, *Accounting
      for Uncertainty in Income Taxes - an Interpretation of FASB Statement No.
      109* (FIN
      48). FIN 48 is intended to clarify the accounting for uncertainty in income
      taxes recognized in a company’s financial statements and prescribes the
      recognition and measurement of a tax position taken or expected to be taken
      in a
      tax return. FIN 48 also provides guidance on de-recognition, classification,
      interest and penalties, accounting in interim periods, disclosure and
      transition.





Under
      FIN
      48, evaluation of a tax position is a two-step process. The first step is to
      determine whether it is more-likely-than-not that a tax position will be
      sustained upon examination, including the resolution of any related appeals
      or
      litigation based on the technical merits of that position. The second step
      is to
      measure a tax position that meets the more-likely-than-not threshold to
      determine the amount of benefit to be recognized in the financial statements.
      A
      tax position is measured at the largest amount of benefit that is greater than
      50% likely of being realized upon ultimate settlement.





Tax
      positions that previously failed to meet the more-likely-than-not recognition
      threshold should be recognized in the first subsequent period in which the
      threshold is met. Previously recognized tax positions that no longer meet the
      more-likely-than-not criteria should be de-recognized in the first subsequent
      financial reporting period in which the threshold is no longer met.





The
      adoption of FIN 48 during the year ended December 31, 2007 did not have a
      material effect on the Company’s financial position





The
      Company is subject to a 5% business tax on the business income of our Jinan
      Broadband subsidiary.





Deferred
      taxes are recognized for the future tax consequences attributable to temporary
      differences between the carrying amounts of assets and liabilities for financial
      statement purposes and income tax purposes using enacted rates expected to
      be in
      effect when such amounts are realized or settled. The effect on deferred taxes
      of a change in tax rates is recognized in income in the period that includes
      the
      enactment date.





j)**
            Revenue
                Recognition


Revenue
        is recorded as services are provided to customers. Provision for discounts
        and
        rebates to customers, estimated returns and allowances and other adjustments
        are
        provided for in the same period when related revenues are
        recorded.





k)
            Net
                Loss Per Share





Basic
      and
      diluted net loss per share have been computed by dividing the net loss by the
      weighted average number of common shares outstanding. The assumed exercise
      of
      dilutive warrants, less the number of treasury shares assumed to be purchased
      from the proceeds of such exercises using the average market price of the
      Company’s common stock during each respective period, have been excluded from
      the calculation of diluted net loss per share as their effect would be
      antidilutive.





l) **
            Foreign
                Currency Translation





The
      Company’s Jinan Broadband subsidiary located in China uses its local currency
      (RMB) as its functional currency. Translation adjustments are reported as other
      comprehensive income or expenses and accumulated as other comprehensive income
      in the equity section of the balance sheet. The financial information is
      translated into U.S. Dollars at prevailing or current rates respectively, except
      for revenue and expenses which are translated at average current rates during
      the reporting period.





Exchange
      gains and losses resulting from accumulated losses are reported as a separate
      component of stockholders’ equity and are included in Comprehensive Loss. The
      currency translation adjustment increased equity by $397,759 for the period
      ended December 31, 2007.





m)
            Concentrations
                of Credit Risk





Financial
      instruments that potentially subject the Company to concentrations of credit
      risk consist principally of accounts receivable.





The
      Company generally requires advance payments on the provision of internet
      services. Other concentrations of credit risk are limited due to the large
      customer base in Jinan, a sub-provincial city of Shandong province in the
      People’s Republic of China.




F-10





n)
            Fair
                value of Financial Instruments





The
      fair
      values of accounts receivable, prepaid expenses and  accounts
      payable and accrued expenses are estimated to approximate the carrying values
      at
      December 31, 2007 due to the short maturities of such instruments.





o)**
            Reclassifications





Certain
      prior year amounts have been reclassified to conform to the manner of
      presentation in the current year.





**3.**   **Going
      Concern**





The
      accompanying financial statements are presented on a going concern basis. The
      Company generated a net loss of $1,976,753 during the year ended December 31,
      2007. This condition raises substantial doubt about the Company’s ability to
      continue as a going concern. The Company's continuation as a going concern
      is
      dependent on its ability to meet its obligations, to obtain additional financing
      as may be required and ultimately to attain profitability. The financial
      statements do not include any adjustments that might result from the outcome
      of
      this uncertainty.


Management
        plans to raise additional funds through debt or equity offerings or to seek
        merger opportunities with other companies. Management has yet to decide what
        type of offering the Company will use, how much capital the Company will
        raise
        or which companies it may seek merger opportunities with. There is no guarantee
        that the Company will be able to raise any capital through any type of offerings
        or merge with any other company.


**4.**    **Property
      and Equipment**





Property
      and equipment at December 31, 2007 and 2006 consist of the
      following:




2007
              
              2006Furniture,
                  fixtures and electrical appliances
              
              $
              631,774
              
              $
              -Headend
                  facilities and fiber infrastructure
              
              
              11,479,029
              
              
              -12,110,803
              
              
              -Less
                  accumulated depreciation
              
              
              (1,777,698
              )
              
              -$
              10,333,105
              
              $
              -





Depreciation
      expense amounted to $1,718,307, and $0, for the years ended December 31, 2007
      and 2006, respectively.




**5.**    **Accrued
      Expenses**





Accrued
      expenses at December 31, 2007 and 2006 consist of the following:




2007
              
              2006Accrued
                  expenses
              
              $
              253,713
              
              $
              6,762Accrued
                  payroll
              
              
              300,360
              
              
              -$
              554,073
              
              $
              6,762




**6.**   **Accumulated
      Other Comprehensive Income**





Accumulated
      other comprehensive income at December 31, 2007 and 2006 amounted to $397,759
      and $0, respectively. This amount consisted of the currency translation
      adjustment from the Renminbi to the US dollar.





**7.**   **Warrants**


In
        connection with the Company’s Share Exchange and capital raising efforts the
        Company has issued the Investor Warrants to investors and service providers
        to
        purchase shares of the Company at a fixed exercise price and for a specified
        period of time. The following table outlines the Investor Warrants outstanding
        as of December 31, 2007:





**Number
                of****Warrants**
            
            **Exercise**
            
            **Expiration****Name**
            
            **Issued**
            
            **Price**
            
            **Date**Maxim
                Financial Corporation
            
            
            3,974,800
            
            $
            0.60
            
            
            3/24/2009WestPark
                Capital, Inc.
            
            
            640,000
            
            $
            0.60
            
            
            3/24/2009BCGU
                LLC
            
            
            500,000
            
            $
            0.60
            
            
            3/24/2009Other
                Investors
            
            
            4,000,000
            
            $
            2.00
            
            
            3/24/20099,114,800


On
        January 11, 2008, as part of the Settlement Agreement described below, the
        Company agreed to extend the expiration date of all warrants until June 11,
        2013, pending receipt of certain releases from these
        investors.




F-11




**8.**   **Income
      Taxes**





The
      Company’s current management does not believe that China Broadband, Inc. has
      filed United States corporate income tax returns for several years prior to
      the
      January 23, 2007 merger transaction and accompanying change in management.
      Management is investigating and intends to file appropriate tax returns to
      bring
      the Company into compliance. Management believes that because of the lack of
      taxable income there will be no material penalties resulting from any previous
      non-compliance.





Management
      believes that it has $6,706,453 of pre-exchange transaction net operating loss
      carryovers that expire in various years through 2025. It is reasonably possible,
      that in the course of bringing the Company’s U.S. income tax filings up to date,
      a different net operating loss carryover will be determined. Furthermore, the
      future use of any pre-exchange transaction net operating loss carryovers will
      be
      significantly limited under section 382 of the internal revenue code because
      of
      the change of control in January 2007 as well as by previous changes in the
      control of the Corporate entity. The extent of these limitations has not yet
      been determined.





During
      the year ended December 31, 2007 the Company generated an additional U.S. net
      operating loss carryover of $1,023,487 which expires in 2027. Jinan Broadband
      has generated a Chinese net operating loss carryover of $732,498 (of which
      the
      Company’s 51% share is $373,574) which expires in 2012. The estimation of the
      income tax effect of any future repatriation of the Company’s 51% share of Jinan
      Broadband’s profits is not practicable. This is because it may involve
      additional Chinese taxation the distributions, or sale proceeds, to the extent
      that they are in excess of the investments made, but with credits for some
      or
      all of the Chinese taxes against U.S. taxes, plus the utilization of operating
      losses of the WFOE. All of the foregoing would be subject to various
      tax-planning strategies.





China
      Broadband Ltd. is not subject to Cayman Islands taxation.





The
      Company has not recognized deferred tax assets relating to the excess of its
      income tax bases in its non-U.S. subsidiaries over their financial statement
      carrying value because the Company expects to hold the investments and reinvest
      future earnings indefinitely. Such excess tax basis is approximately $741,000
      at
      December 31, 2007.





The
      Company’s income tax benefit for the year ended December 31, 2007 consisted
      entirely of foreign deferred taxes arising from an operating loss
      carryforward.





The
      Company’s deferred tax assets and liabilities at December 31, 2007 consisted
      of:





2007Deferred
                tax assets:U.S.
                NOL - pre-stock exchange transaction
            
            $
            2,280,194U.S.
                NOL - subsequent to stock exchange transaction
            
            
            347,986Foreign
                NOL
            
            
            93,393Accrued
                payroll
            
            
            72,098Total
                deferred tax assets
            
            
            2,793,671Less:
                valuation allowance
            
            
            (2,750,133
            )Deferred
                tax liability - intangible assets
            
            
            (167,620
            )Net
                deferred tax liability
            
            $
            (124,082
            )




F-12




The
      deferred tax valuation allowance increased $2,750,133 during the year ended
      December 31, 2007. $2,280,194 of this amount was acquired in the stock exchange
      transaction and the remaining $469,939 by the companies operations.





The
      Company had no deferred tax assets or liabilities at December 31,
      2006.





A
      reconciliation of the expected income tax derived by the application of the
      34%
      U.S. corporate income tax rate to the Company’s loss before income tax benefit
      is as follows:





2007Net
                loss before income taxes
            
            $
            (2,026,821
            )Expected
                income tax benefit at 34%
            
            
            (689,118
            )Nondeductible
                expenses
            
            
            43,662Rate-differential
                on foreign income invested indefintiely
            
            
            110,848WFOE
                NOL not recognized for indefinite reversal
            
            
            14,601Increase
                in valuation allowance
            
            
            469,939Income
                tax benefit recognized
            
            $
            (50,068
            )




**9.**   **Commitments
      and Contingencies**





Leases





The
      Company pays approximately $55,000 (400,000 RMB) annually for rent at its
      facilities in Jinan, China, renewable on an annual basis.





The
      company utilizes approximately 1,000 square feet of space from Maxim Financial
      Corporation for its corporate headquarters for a monthly rental fee of $2,000.
      Maxim Financial Corporation provided consulting services to the Company during
      the years ended December 31, 2007 and 2006 and has agreed to discharge all
      rental costs under the terms of its consulting agreement with the Company
      through December 2007. In addition, Maxim Financial Corporation has agreed
      to
      defer all monthly rental payments beginning January 2008 until the Company’s
      next capital raise subsequent to January 2008.





Litigation





The
      Company is not a party to any legal proceedings.





**10.**   **Recent
      Accounting Pronouncements**





In
      September 2006, the FASB issued SFAS No. 157, “Fair Value Measurements” (SFAS
      No. 157). The purpose of SFAS No. 157 is to define fair value, establish a
      framework for measuring fair value, and enhance disclosures about fair value
      measurements. The measurement and disclosure requirements are effective for
      the
      company beginning in the first quarter of fiscal year 2008.





In
      February 2007, the FASB issued SFAS No. 159, “The Fair Value Option for
      Financial Assets and Financial Liabilities” (SFAS No. 159). SFAS
      No. 159 permits companies to choose to measure certain financial
      instruments and certain other items at fair value. The standard requires that
      unrealized gains and losses on items for which the fair value option has been
      elected be reported in earnings. SFAS No. 159 is effective for the company
      beginning in the first quarter of fiscal year 2008, although earlier adoption
      is
      permitted.





In
      December 2007, the FASB issued SFAS No. 141 (R), “Business
      Combinations” (“SFAS 141(R)”) and SFAS No. 160, “Noncontrolling Interests
      in Consolidated Financial Statements” (“SFAS 160”). The standards are intended
      to improve, simplify, and converge internationally the accounting for business
      combinations and the reporting of noncontrolling interests in consolidated
      financial statements. SFAS 141(R) requires the acquiring entity in a business
      combination to recognize all (and only) the assets acquired and liabilities
      assumed in the transaction; establishes the acquisition-date fair value as
      the
      measurement objective for all assets acquired and liabilities assumed; and
      requires the acquirer to disclose to investors and other users all of the
      information they need to evaluate and understand the nature and financial effect
      of the business combination. SFAS 141(R) is effective for fiscal years, and
      interim periods within those fiscal years, beginning on or after
      December 15, 2008. SFAS 141(R) applies prospectively to business
      combinations for which the acquisition date is on or after the beginning of
      the
      first annual reporting period beginning on or after December 15, 2008.
      Earlier adoption is prohibited.




F-13




SFAS
      160
      is designed to improve the relevance, comparability, and transparency of
      financial information provided to investors by requiring all entities to report
      noncontrolling (minority) interests in subsidiaries in the same way—as equity in
      the consolidated financial statements. Moreover, SFAS 160 eliminates the
      diversity that currently exists in accounting for transactions between an entity
      and noncontrolling interests by requiring they be treated as equity
      transactions. SFAS 160 is effective for fiscal years, and interim periods within
      those fiscal years, beginning on or after December 15, 2008. Earlier
      adoption is prohibited. In addition, SFAS 160 shall be applied prospectively
      as
      of the beginning of the fiscal year in which it is initially applied, except
      for
      the presentation and disclosure requirements. The presentation and disclosure
      requirements shall be applied retrospectively for all periods presented. The
      Company does not have an outstanding noncontrolling interest in one or more
      subsidiaries and therefore, SFAS 160 is not applicable to the Company at this
      time.





Management
      does not believe that any recently issued, but not yet effective, accounting
      standards, if currently adopted, would have a material effect on the
      accompanying financial statements.





**11.**  **Subsequent
      Events**





***Settlement
      Agreement and Convertible Note and Warrant Financing***





On
      January 11, 2008, the Company entered into a Settlement Agreement (the
“Settlement Agreement”) by and among the Company and its subsidiaries, Stephen
      P. Cherner, Maxim Financial Corporation, Mark L. Baum, BCGU, LLC, Mark I Lev,
      Wellfleet Partners, Inc., Yue Pu, Clive Ng, Chardan Capital Markets, LLC
      (“Chardan Capital”), Jaguar Acquisition Corporation (“Jaguar”), and China
      Cablecom Holdings, Ltd (“Cablecom Holdings”).


Simultaneously,
        the Company consummated a private convertible note and warrant financing
        with
        gross proceeds of $4,850,000 (the “January 2008 Financing”), through Chardan
        Capital acting as Placement Agent and appointed three additional directors
        and a
        new Chief Executive Officer to the Company. The following is a summary only
        of
        the material terms of the Settlement Agreement, Employment
        Agreement Amendments and the
        January 2008 Financing related agreements (including the note purchase
        agreement, the form of Notes and form of warrants) which were filed as exhibits
        to our Current Report on Form 8-K dated January 11, 2008, the provisions
        of
        which are incorporated by reference herein.





*Settlement
      Agreement*


The
        Settlement Agreement was negotiated by the Company, its advisors and management
        and certain shareholders, for purposes of facilitating the Company’s business
        plan and expediting and facilitating the Company’s financing activities and
        resolving all disputes with management and certain investors and consultants
        concerning possible claims that such investors suggested might be brought
        against Mr. Ng for his activities in forming China Cablecom and its entry
        into a
        Proposed Merger (as defined below) with a subsidiary of Jaguar (as defined
        below) as violative of his employment agreement with the Company. The Settlement
        Agreement provides, subject to the terms thereof, for general mutual releases
        of
        all executives and management and their affiliated entities and also provides
        for the modification of employment agreements of both Mr. Clive Ng and Mr. Pu. The
        Settlement Agreement also calls for the transfer of certain securities by
        Mr. Ng
        to the Company and to certain of the Company’s shareholders and consultants, as
        elaborated further herein in exchange for releases in favor of the Company
        and
        management and their affiliates.


Among
      other provisions, pursuant to the Settlement Agreement:




·
            Clive
                Ng has agreed to transfer, not later than three business days after
                the
                closing of the proposed merger of a subsidiary of Cablecom Holdings,
                as
                successor to Jaguar Acquisition Corporation, a Delaware corporation
                (“Jaguar”) in its proposed redomestication merger , with and into China
                Cablecom, Ltd., a private limited liability British Virgin Islands
                company
                (“China Cablecom”) (the “Proposed Merger”), of 390,000 shares of common
                stock of Cablecom Holdings (the “Cablecom Holdings Shares”), the resulting
                surviving parent entity after the Proposed Merger. The 390,000 Cablecom
                Holdings Shares will only be issued in the event of consummation
                of the
                Proposed Merger and is to be transferred by Mr. Ng on an “as is basis”,
                except that such shares have the same lock-up restrictions, registration
                or other rights, privileges or benefits as Mr. Ng has for all other
                shares
                to be issued to him by Cablecom Holdings under the Proposed Merger
                terms.
                The 390,000 Cablecom Holdings Shares will only be issued upon receipt
                of
                releases from certain parties listed in the Settlement
                Agreement;




·
            Clive
                Ng has agreed to (i) transfer an aggregate of 400,000 shares of the
                Company’s common stock (the “Common Stock”) owned by him, to an
                unaffiliated escrow agent on behalf of a consultant that was a party
                to
                the Settlement Agreement, in accordance with the terms of an escrow
                agreement which provides, among other things, that such shares will
                only
                be released from escrow in the event that releases are obtained from
                certain parties listed in the Settlement Agreement, and (ii) make a
                charitable gift of an aggregate of 28,444 shares of Common Stock
                to a
                charitable organization selected by Mr. Lev, upon receipt of releases
                from
                certain parties listed in the Settlement
                Agreement;




F-14




·
            The
                Company and each of Messrs. Ng and Pu, have agreed to modifications
                to the
                employment agreements of such persons (the “Employment Agreement
                Amendments”), reducing their time commitments to the Company and its
                subsidiary and providing that once replacement executive officers
                have
                been hired (and in the case of Mr. Ng, assuming Mr. Pu continues
                in his
                role as chief financial officer, eliminating his executive duties
                and he
                will only continue as the Chairman and a director of China Broadband
                and
                the Company) , requiring in the case of Mr. Ng that he be subject
                to an
                ongoing obligation to offer acquisition candidates in the stand-alone,
                independent broadband business to China Broadband in the future (and
                recognizing that acquisition candidates involving acting as a joint
                venture provider of integrated cable television services in the People’s
                Republic of China and related activities, but which does not include
                the
                provision of Stand-Alone Broadband Services are the business of China
                Cablecom) and allowing them to continue to be involved with certain
                other
                activities and to continue in their executive capacities with Cablecom
                Holdings or its successor after the Proposed Merger. In addition,
                Mr. Ng
                has waived his right to receive all accrued salary previously owed
                to
                him;




·
            The
                Company and each of Messrs. Ng and Pu, have agreed to modifications
                to the
                employment agreements of such persons (the “Employment Agreement
                Amendments”), reducing their time commitments to the Company and its
                subsidiary and providing that once replacement executive officers
                have
                been hired (and in the case of Mr. Ng, assuming Mr. Pu continues
                in his
                role as chief financial officer, eliminating his executive duties
                and he
                will only continue as the Chairman and a director of China Broadband
                and
                the Company) , requiring in the case of Mr. Ng that he be subject
                to an
                ongoing obligation to offer acquisition candidates in the stand-alone,
                independent broadband business to China Broadband in the future (and
                recognizing that acquisition candidates involving acting as a joint
                venture provider of integrated cable television services in the People’s
                Republic of China and related activities, but which does not include
                the
                provision of Stand-Alone Broadband Services are the business of China
                Cablecom) and allowing them to continue to be involved with certain
                other
                activities and to continue in their executive capacities with Cablecom
                Holdings or its successor after the Proposed Merger. In addition,
                Mr. Ng
                has waived his right to receive all accrued salary previously owed
                to
                him;




·
            Mr.
                Ng has agreed to assign, and did assign 7,017,814 shares of Common
                Stock
                owned beneficially by him to the investors (other then Chardan Capital
                which did not receive shares from Mr. Ng) in the private January
                2008
                Financing as described below, thereby facilitating the January 2008
                Financing while avoiding additional dilution to the Company’s current
                stock and warrant holders;




·
            Mr.
                Ng has agreed to transfer to certain private investors who acquired
                shares
                directly from him in July of 2007, an aggregate of 566,790 shares
                of
                Common Stock owned beneficially by him, in exchange for releases
                and
                representation letters to be executed by such
                persons;




·
            Chardan
                Capital, our placement agent in the private financing and a party
                to the
                Settlement Agreement, completed the January 2008 Financing concurrently
                upon execution by all related parties of the Settlement
                Agreement;




·
            Mr.
                David Zale and Mr. Jonas Grossman were appointed as directors joining
                Messrs. Yue Pu and Clive Ng on the board. Additionally, as a condition
                to
                Closing of the January 2008 Financing, Mr. James Cassano was appointed
                to
                the Board.




·
            The
                Company agreed to extend the expiration dates of 4,000,000 warrants
                to
                purchase Common Stock at an exercise price of $2.00 per share, issued
                to
                certain private placement investors (“Investor Warrants”) in the Company’s
                private placement of common stock and warrants in 2007, from March
                of
                2009, through January 11, 2013, upon receipt of releases from such
                Investor Warrant holders. In addition, the Company has offered to
                BCGU,
                LLC, WestPark Capital, Inc., Maxim Financial Corporation, who were
                issued
                500,000, 640,000 and 3,974,800 warrants exercisable at $.60 per share
                in
                January of 2007, the right, at their discretion, to extend the
                exercisability period of their respective warrants through January
                11,
                2013 or, in the alternative, the right to receive a scrip right to
                execute
                the unexercised portion of their warrants, at any time between the
                time of
                expiration date of their unexercised warrants and continuing through
                January 11, 2013.


Additional
        specific provisions relating to the terms of this Settlement Agreement can
        be
        found under the “Settlement Agreement” subsection of “Item 1. Description of
        Business” above, an in our “Risk Factors” subsection above.
 
 ***Simultaneous
        Closing of $4,971,250 Convertible Note and Warrant Financing, issuance of
        Shares
        and Warrants***
 
 On
        January 11, 2008, and simultaneously with the entry into the Settlement
        Agreement and in continuation with competion of the January 2008 Financing,
        we
        entered into and consummated a subscription agreement (the “Subscription
        Agreement”) with ten accredited investors (inclusive of Chardan Capital) with
        respect to the issuance of an aggregate of $4,971,250 principal amount of
        Notes
        due January 11, 2013, and Class
        A
        Warrants to
        purchase an aggregate of 6,628,333 shares of common stock of the Company
        at $.60
        per share expiring on June 11, 2013.





An
      aggregate of $4,971,250 principal amount of Notes was issued to ten investors
      including Chardan Capital which applied its 2.5% cash commission towards a
      subscription for Notes and Class A Warrants. Interest on the Notes compound
      monthly at the annual rate of five percent (5%) with the maturity date on
      January 11, 2013, if not sooner paid. Each holder of a Note can convert all
      or
      any portion of the then aggregate outstanding principal amount of the Note,
      together with interest, into shares of Common Stock at a conversion price of
      $0.75 per share, for or a total of 6,628,333 shares as of the date of issuance.
      The Notes are granted “full ratchet” anti dilution protection for the first
      three years, pursuant to which the conversion price of the Notes will be
      adjusted downward in the event of the issuance by the Company of Common Stock
      or
      rights to acquire Common Stock at prices below $.75 per share (or below such
      other conversion price of the Notes as is then in effect) to such lower price.
      Thereafter and until repaid, the Notes provide only for weighted average
      anti-dilution price protection adjustment. In addition, the Notes are subject
      to
      certain customary anti dilution protections for stock splits, combinations
      or
      similar transactions of the Company.




F-15




An
      aggregate of 6,628,333 Class A Warrants, exercisable at $0.60 per share and
      expiring on June 11, 2013 were issued pursuant to the Subscription Agreement
      as
      part of the January 2008 Financing. The Class A Warrants shall be exercisable
      (with cash or via cashless exercise) commencing one hundred and eighty-one
      (181)
      days after the closing date of the January 2008 Financing until 65 months
      thereafter, June 11, 2013. The Class A Warrants are subject to “full ratchet”
anti-dilution protection for the first three years, pursuant to which the
      exercise price of the Class A Warrants will be adjusted downward in the event
      of
      the issuance by the Company of Common Stock or rights to acquire Common Stock
      at
      prices below $.60 per share (or below such other exercise price of the Class
      A
      Warrants as is then in effect) to such lower price. Thereafter and until all
      Class A Warrants are exercised or expire, the Class A Warrants provide only
      for
      weighted average anti-dilution price protection adjustment. In addition, the
      Class A Warrants are subject to certain customary anti-dilution protections
      for
      stock splits, combinations or similar transactions of the Company.





*Placement
      Agent Fee to Chardan Capital Markets, LLC*





In
      connection with their engagement as a placement agent, Chardan Capital has
      been
      compensated a $10,000 due diligence fee and reimbursement of legal and other
      expenses, and a cash placement agent fee of 2.5% based on the total amount
      sold
      to investors, or $121,250 based on $4,850,000 of principal amount of Notes
      issued to other investors. Chardan Capital has, pursuant to the terms of their
      engagement agreement, agreed to apply their cash compensation of $121,250 into
      an investment in a $121,250 Note and 166,667 Class A Warrants at the same terms
      as all other investors in the offering. In addition, Chardan Capital was
      compensated warrants to acquire 1,131,667 shares of the Company’s Common Stock
      at an exercise price of $.50 per share exercisable commencing January 11, 2008
      and expiring on June 11, 2013 (the “Broker Warrants”). The Broker Warrants are
      identical to the Class A Warrants in all other material respects.





*Assignment
      By Clive Ng of Shares to Investors*





To
      incentivize the investors in January 2008 Financing and facilitate such
      financing, and as contemplated under the terms of the Settlement Agreement,
      Mr.
      Clive Ng assigned an aggregate of 7,017,814 shares of Common Stock beneficially
      owned by him to the January 2008 Financing investors, other than Chardan
      Capital, at a nominal purchase price of $.01 per share.





*Release
      of Lock - Up Agreements*


Prior
        to
        the assignment of the above shares to the January 2008 Financing investors,The
        Company, 88 Holdings, Inc., China Broadband Partners, Ltd., BCGU, LLC, MVR
        Investments, LLC, Stephen P. Cherner and WestPark Capital, Inc. were each
        shareholder parties to a Lock-Up Agreement dated as of January 23, 2007 (the
        “Lock-Up Agreement”). The Lock-Up Agreement provided, that each such shareholder
        shall only be permitted to sell 5% of the shares originally issued to them
        as
        scheduled in the Lock-Up Agreement, during any 30 day period and, that the
        Company’s management may review the lock up provisions and increase the number
        of shares that may be sold provided that, among other conditions, such
        modification is made *pari
        pasu* among
        all
        shareholders to this Lock-Up Agreement based on their share ownership. As
        a
        condition subsequent to the January 2008 Financing requested by Chardan Capital,
        and to remove any contractual restrictions relating to the 7,017,084 shares
        of
        Common Stock assigned by Mr. Ng to the Note investors to facilitate the
        financing, the Company and each of the shareholder parties to the Lock-Up
        Agreement agreed to the termination of this Lock-Up Agreement for all parties
        effective as of January 13, 2008.




*Board
      of Directors and Employment Agreement Amendments*





Simultaneously
      with the closing of the January 2008 Financing, and entry into the Settlement
      Agreement, Messrs. David Zale, James Cassano and Jonas Grossman were appointed
      as directors of the Company, joining Messrs. Clive Ng and Yue Pu. Prior to
      the
      appointment of Messrs. Zale, Cassano and Grossman, such persons had no
      affiliations or business relationship with the Company, except that Mr. Grossman
      was and continues to be, a partner and officer of Chardan Capital which received
      a placement agent fee of notes and warrants in connection with the January
      2008
      Financing as described above. Additionally, the board appointed Mr. Tom Lee
      as
      new Chief Executive Officer and Principal Executive Officer on January 11,
      2008





Additionally,
      Messrs. Yue Pu and Clive Ng have each entered into amendments to their
      employment agreements which delineate the scope of services required from each
      of them for the Company and its subsidiaries, and permits mutual director and
      executive affiliations with the Company and Cablecom Holdings. Mr. Ng’s
      Employment Agreement Amendment also calls for his work requirements to be
      appropriately reduced to a non-executive position, although he remains as
      Chairman and director. The Employment Agreement Amendments were approved by
      the
      board and by the disinterested board members, Messrs. Zale and Grossman and
      was
      required as part of the Settlement Agreement.





***Shandong
      Newspaper Cooperation Agreement***




On
      March
      7, 2008, through our indirect WFOE subsidiary in the PRC, we entered into a
      Cooperation Agreement (the "Shandong Newspaper Cooperation Agreement") by and
      among, Shandong Broadcast & TV Weekly Press and Modern Movie & TV
      Biweekly Press, each PRC companies (collectively "Shandong Newspaper"). The
      Shandong Newspaper Cooperation Agreement provided for, among other terms, the
      creation of a joint venture entity in the PRC, Shandong Lushi Media Co., Ltd.
      ("Shandong Media") that would own and operate Shandong Newspaper's television
      program guide, newspaper and magazine publishing business in the Shandong region
      of the PRC (the "Shandong Newspaper Business") which businesses were previously
      owned and operated by the Shandong Newspaper entities pursuant to exclusive
      licenses.




F-16




Under
      the
      terms of the Shandong Newspaper Cooperation Agreement and related transaction
      documents, the Shandong Newspaper entities mentioned above will contribute
      their
      entire Shandong Newspaper Business and transfer certain employees, to Shandong
      Media in exchange for a 50% stake in Shandong Media, with the other 50% of
      Shandong Media to be owned by our PRC based operating subsidiary. In exchange
      therefore, the Cooperation Agreement provides for total initial consideration
      from of approximately $1.5 million (approximately 10 million RMB based on
      exchange rates at the time) which shall be contributed to Shandong Media as
      working and acquisition capital, of which the Company has already paid
      approximately $300,000 (approximately 2 million RMB) in early March 2008 as
      a
      down payment.




In
      addition to the initial purchase price of $1.5 million (10 million RMB), the
      Shandong Newspaper Cooperation Agreement provides for additional consideration
      of approximately US $757,757 and US $3,000,000 (between 5 million RMB and 20
      million RMB, respectively, based on exchange rates at the time) to be paid
      as a
      capital contribution to Shandong Media in the event that certain performance
      thresholds are met during the first 12 months of operations after closing the
      transaction for a total maximum purchase price of approximately $4.5 (30 million
      RMB based on exchange rates at the time).




In
      the
      event that audited annual net profits during the first year after closing of
      the
      transaction relating to the Shandong Newspaper Cooperation
      Agreement:




·
            equals
                or exceeds 16 million RMB, then we will be required to contribute
                an
                additional 20 million RMB (or, approximately $3,000,000 based on
                current
                exchange rates) to the Shandong Media joint venture;




·
            equals
                or exceeds 4 million RMB but less than 16 million RMB, then we will
                be
                required to contribute 125% of such net profits to the Shandong Media
                joint venture, and




·
            is
                less then 4 million RMB, then only an additional 5 million RMB
                (approximately US $757,575 based on current exchange rates).




*Description
      of Shandong Newspaper Business Being Acquired*




The
      Shandong Newspaper Business being acquired from Shandong Newspaper by the
      Shandong Media joint venture includes the distribution of periodicals, the
      publication of advertising, the organization of public relations events, the
      provision of information related services, copyright transactions, the
      production of audio and video products, the provision of audio value added
      communication services. The Shandong Newspaper Cooperation Agreement also
      provides that these businesses will be operated primarily by employees
      contracted to Shandong Media through secondment by the respective Shandong
      Newspaper entities.




In
      addition, the Shandong Newspaper entities are required, at closing upon
      completion of all closing conditions, to enter into an Exclusive Advertising
      Agency Agreement and an Exclusive Consulting Services Agreement with Shandong
      Media which require that the Shandong Newspaper entities shall appoint Shandong
      Media as its exclusive advertising agent and provider of technical and
      management support for a fee.





The
      closing of the transaction is dependant upon, among other conditions, the
      obtaining of all necessary PRC government consents, payment of the initial
      purchase price set forth above, and entry into the Exclusive Advertising Agency
      Agreement and Exclusive Consulting Service Agreement. The
      Company expects to close this transaction during the second quarter of 2008.




F-17