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


**WASHINGTON,
      D.C. 20549**





**FORM
      10-KSB/A**


(Amendment
      No. 1)




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** .







**Explanatory
      Note**




This
      Annual Report on Form 10-KSB/A is being filed as Amendment Number 1 to our
      Annual Report on Form 10-KSB which was originally filed with the Securities
      and
      Exchange Commission (the ‘‘Commission’’) on April 15, 2008 (the “Original
      Filing”). We are filing this Form 10-KSB/A to restate our financial statements
      for the year ending December 31, 2007. The reasons for the restatement are
      summarized as follows:





On
      August
      13, 2008, the board of directors of China Broadband, Inc. (the “Company”)
      concluded that the Company’s previously issued financial statements for the
      periods indicated below should no longer be relied upon because of (i) the
      Company’s discovery of previously unrecognized deferred revenues from payments
      received from customers, and (ii) the incorrect application of U.S. generally
      accepted accounting principles (“GAAP”) with respect to the recognition of
      revenues from prepaid internet service contracts. Accordingly, the Company
      has
      filed restated financial statements for the year ended December 31, 2007, and
      for the quarterly periods ended June 30, 2007, September 30, 2007 and March
      31,
      2008.





Except
      as
      otherwise stated, all financial information contained in this Annual Report
      on
      Form 10-KSB/A gives effect to these restatements. This Form 10-KSB/A amends
      and
      restates only certain information in the following sections as a result of
      the
      restatements described above:





Part
      II


Item
      6.
      Management's Discussion and Analysis of Financial Condition and Results of
      Operations: Results of Operations, Critical Accounting Policies.


Item
      7.
      Financial Statements: Balance Sheet, Statement of Operations, Statement of
      Cash
      Flows, Statement of Changes in Shareholder’s Equity, Notes 1, 3, 6,
      8.





For
      the
      convenience of the reader, this Form 10-KSB/A sets forth the entire Form 10-KSB
      which was prepared and relates to the Company as of and for the year ending
      December 31, 2007. However, this Form 10-KSB/A only amends and restates the
      Items described above to reflect the effects of the restatement and no attempt
      has been made to modify or update other disclosures presented in the original
      filing.





Accordingly,
      except for the foregoing amended information, this Form 10-KSB/A continues
      to
      speak as of the date of the Original Filing and does not reflect events
      occurring after the Original Filing, and does not modify or update those
      disclosures affected by subsequent events. Forward looking statements made
      in
      the Original Filing have not been revised to reflect events, results or
      developments that have become known to us after the date of the Original Filing
      (other than the current restatements described above), and such forward looking
      statements should be read in their historical context. Unless otherwise stated,
      the information in this Form 10-KSB/A not affected by such current restatements
      is unchanged and reflects the disclosures made at the time of the Original
      Filing.









**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
            
            47










**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
                  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 11 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.
      On
      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 $2,839,197 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 $1,181,218 as compared to $0 for 2006. During 2006 we had
      no
      operations. Gross profit as a percentage of revenue was 41.6% for
      2007.





*Selling,
      General and Administrative Expenses*





Selling,
      general and administrative expenses for 2007 were $954,382 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* and
      Amortization





Depreciation
      expense for 2007 was $1,795,501 as compared to $0 for 2006. During 2006 we
      had
      no operating assets. Depreciation expense during 2007 relates to the
      depreciation expense of $1,718,307 on the approximately $10 million of property,
      plant and equipment, net at our Jinan broadband subsidiary and the amortization
      expense of $ 77,194 related to the service agreement associated with our
      acquisition of Jinan Broadband.





*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 $439,722 of our operating losses were allocated to Jinan
      Parent





*Income
      Tax Benefit*





Our
      income tax benefit was $147,955 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 $4,635,625. As of December 31, 2007, we had total current liabilities of
      $5,975,991. 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 $72,188 and $(124,940), respectively. During such period
      other changes in working capital provided cash of approximately $1,057,306
      and
      $6,763, respectively, resulting in cash being provided by (used in) operating
      activities of $1,129,494 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 $331,764
      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. 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. 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 PRC subsidiaries incur debt
      on their own behalf in the future, the instruments governing the debt may
      further 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. Accordingly, even if we are profitable as a result of our PRC based
      assets, operations and subsidiaries, PRC regulations prevent the payment by
      these PRC entities 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 these 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. Our management evaluates its estimates on an on-going basis based on
      historical experience and on various other assumptions it believes are
      reasonable under the circumstances, the results of which form the basis for
      making judgments about the carrying values of assets and liabilities that are
      not readily apparent from other sources. We acquired our Jinan Subsidiary
      effective April 1, 2007 and therefore our historical experience with operations
      in China is limited and may change in the future as we continue to operate
      our
      Jinan subsidiary. Actual results may differ from these estimates under different
      assumptions or conditions.




We
      believe the following critical accounting policies affect our significant
      judgments and estimates used in the preparation of its financial statements.




*Revenue
      Recognition*




Revenue
      is recorded as services are provided to customers. The Company generally
      recognizes all revenues in the period in which the service is rendered, provided
      that persuasive evidence of an arrangement exists, delivery has occurred, the
      sales price is fixed or determinable, and collection is reasonably assured.
      The
      Company records deferred revenue for payments received from customers for the
      performance of future services and recognizes the associated revenue in the
      period that the services are performed. Provision for discounts and rebates
      to
      customers and other adjustments, if any, are provided for in the same period
      the
      related sales are recorded.




*Accounts
      Receivable*




Accounts
      receivable are recorded at the invoiced amount after deduction of trade
      discounts, business tax and allowances. The Company considers accounts
      receivable to be fully collectible; accordingly, no allowance for doubtful
      accounts has been established. If
      accounts become uncollectible, they will be charged to statements of operations
      when that determination is made. Collections on accounts previously written
      off,
      if any, are included in other income as received.




*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.




32




*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.





*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 business is currently conducted in and from
      China in Renminbi. In this report, all references to “Renminbi” and “RMB” are to
      the legal currency of China and all references to U.S. dollars, dollars, $
      and
      US$ are to the legal currency of the United States. The Company makes no
      representation that any Renminbi or U.S. dollar amounts could have been, or
      could be, converted into U.S. dollars or Renminbi, as the case may be, at any
      particular rate, the rates stated below, or at all. The Chinese government
      imposes control over its foreign currency reserves in part through direct
      regulation of the conversion of Renminbi into foreign exchange and through
      restrictions on foreign trade. The Company uses the U.S. dollar as its reporting
      and 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. Financial information is translated
      into U.S. dollars at prevailing or current rates respectively, except for
      revenues and expenses which are translated at average current rates during
      the
      reporting period. Exchange gains and losses resulting from retained profits
      are
      reported as a separate component of stockholders’ equity.




**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
      August 19, 2008, thereunto duly authorized.


**CHINA
                BROADBAND, INC**By:
            /s/
                Marc UrbachName:
              Marc UrbachTitle:
                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)
            
            August
                19, 2008Marc
                Urbach*/s/
                Yue Pu*
            
            Vice
                Chairman of China Broadband, Ltd.
            
            August
                19, 2008Yue
                Pu
            
            and
                China Broadband, Inc., and Principal Accounting Officer and Principal
                Financial Officer and Director*/s/
                Clive Ng*
            
            Chairman,
                Director
            
            August
                19, 2008Clive
                Ng*/s/
                  James Cassano*
            
            Director
            
            August
                19, 2008James
                CassanoDirectorDavid
                Zale*/s/
                Jonas Grossman*
            
            Director
            
            August
                19, 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.


As
        discussed in Note 2, the 2007 financial statements have been restated to
        give
        effect to adjustments related to the recording of deferred
        revenue.




/s/UHY
                LLPUHY
                LLPAugust
                19, 2008
              Albany,
                NY




F
          -
          1





**CHINA
      BROADBAND, INC.**


**CONSOLIDATED
      BALANCE SHEETS**


**December
      31, 2007 and 2006**


2007
              
              2006(Restated)**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
              
              
              1,981,307
              
              
              103,652Total
                  assets
              
              $
              13,654,778
              
              $
              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
              
              
              -Deferred
                  revenue
              
              
              1,252,313
              
              
              -Other
                  current liabilities
              
              
              25,905
              
              
              -Total
                  current liabilities
              
              
              5,975,991
              
              
              331,762Deferred
                  tax liability
              
              
              366,672
              
              
              -Total
                  liabilities
              
              
              6,342,663
              
              
              331,762Minority
                  interest in Jinan Broadband
              
              
              4,879,802
              
              
              -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
              
              
              (8,845,426
              )
              
              (6,831,393Accumulated
                  other comprehensive income
              
              
              331,764
              
              
              -Total
                  shareholders' equity
              
              
              2,022,260
              
              
              (124,940
              )Total
                  liabilities and shareholders' equity
              
              $
              13,654,778
              
              $
              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
              
              2006(Restated)Revenue
              
              $
              2,839,197
              
              $
              -Cost
                  of revenue
              
              
              1,657,979
              
              
              -Gross
                  profit
              
              
              1,181,218
              
              
              -Selling,
                  general and administrative expenses
              
              
              954,382
              
              
              116,073Professional
                  Fees
              
              
              628,490
              
              
              52,105Depreciation
              
              
              1,795,501
              
              
              -Loss
                  from operations
              
              
              (2,197,155
              )
              
              (168,178
              )Interest
                  and other income (expense), net
              
              
              (404,555
              )
              
              (6,762
              )Loss
                  before minority interest
              
              
              (2,601,710
              )
              
              (174,940
              )Minority
                  interest loss in Jinan Broadband
              
              
              439,722
              
              
              -Loss
                  before income taxes
              
              
              (2,161,988
              )
              
              (174,940
              )Income
                  tax benefit
              
              
              (147,955
              )
              
              -Net
                  loss
              
              $
              (2,014,033
              )
              $
              (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)
              
              Total(Restated)
              
              (Restated)
              
              (Restated)
              
              (Restated)Balance
                  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
              
              
              
              
              
              
              
              
              
              
              
              (2,014,033
              )
              
              
              
              
              (2,014,033
              )
              
              (2,014,033
              )Translation
                  adjustment
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              331,764
              
              
              331,764
              
              
              331,764Comprehensive
                  loss
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              $
              (1,682,269
              )Balance
                  December 31, 2007
              
              
              50,048,000
              
              $
              50,048
              
              $
              10,485,874
              
              $
              (8,845,426
              )
              $
              331,764
              
              
              
              
              $
              2,022,260




See
      notes
      to consolidated financial statements.




F
          -
          4




**CHINA
      BROADBAND, INC.**


**CONSOLIDATED
      STATEMENTS OF CASH FLOWS**


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


2007
              
              2006(Restated)Cash
                  flows from operating activities:Net
                  loss
              
              $
              (2,014,033
              )
              $
              (174,940
              )Adjustments
                  to reconcile net loss to netcash
                  provided by operating activities:Stock
                  compensation expense
              
              
              438,674
              
              
              50,000Depreciation
                  and amortization
              
              
              1,795,501
              
              
              -Deferred
                  income tax (benefit)
              
              
              (147,954
              )
              
              -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
              
              
              6,763Deferred
                  revenue
              
              
              230,889
              
              
              -Other
              
              
              (442,306
              )
              
              -Net
                  cash provided by (used in) operating activities
              
              
              1,129,494
              
              
              (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
              
              
              331,764
              
              
              -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
              
              $
              2,186,360
              
              $
              -Consideration
                  paid:Cash
                  paid
              
              $
              2,572,125
              
              $
              -Cash
                  amount owed
              
              $
              3,200,000
              
              $
              -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 internet 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 internet 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 contributed its operating assets to Jinan Broadband and we contributed
      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 $9.3 million resulting in a long term
      intangible asset of approximately $1.5 million.





The
      following table provides the details of the net assets contributed by Jinan
      Parent and the calculation of the pre-tax intangible asset.





Total
                contribution, as per the Cooperation Agreement
            
            $
            10,856,000Fair
                value of net assets contributed by Jinan Parent:Accounts
                receivable
            
            
            579,000Inventory
            
            
            1,310,000Property,
                plant and equipment, net
            
            
            9,610,000Accounts
                payable and accrued expenses
            
            
            (1,165,000
            )Deferred
                revenue
            
            
            (1,021,000
            )Fair
                Value of net assets contributed
            
            
            9,313,000Excess
                of contribution over fair value of net assets
            
            $
            1,543,000





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.




*Restrictions
      on Dividends from PRC Subsidiaries*





We
      have
      not declared or paid dividends to our stockholders during this or our two most
      recently completed fiscal years. All of our operating assets and businesses
      are
      incorporated under the laws of the PRC and do business in the PRC. Under the
      laws governing foreign invested enterprises in the PRC, dividend distribution
      and liquidation are only allowed subject to special procedures under the
      relevant laws and rules which require PRC regulatory approval. In addition,
      Chinese legal restrictions permit payment of dividends only out of net income
      as
      determined in accordance with Chinese accounting standards and regulations.
      Additionally, any debt instruments of the Company’s PRC based subsidiaries may
      further restrict the ability to pay dividends or make other distributions to
      the
      Company, which in turn would limit our ability to pay dividends on our common
      stock.  Accordingly, even if we are profitable as a result of our PRC based
      assets, operations and subsidiaries, PRC regulations prevent the payment by
      these PRC entities of dividends absent compliance with certain rules and
      obtaining appropriate government consents, which we believe will not happen
      in
      the near future, if ever. Additionally, if dividends are declared and able
      to be
      paid, we intend to retain any future earnings to finance the expansion of our
      business and any necessary capital expenditures, and for general corporate
      purposes.




**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. If
      accounts become uncollectible, they will be charged to statements of operations
      when that determination is made. Collections on accounts previously written
      off,
      if any, are included in other income as received.





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 $77,194 during the year ended December 31,
      2007.





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





2008
            
            $
            102,9252009
            
            
            102,9252010
            
            
            102,9252011
            
            
            102,9252012
            
            
            102,925Thereafter
            
            
            1,466,682Total
            
            $
            1,981,307





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. The Company generally
      recognizes all revenues in the period in which the service is rendered, provided
      that persuasive evidence of an arrangement exists, delivery has occurred, the
      sales price is fixed or determinable, and collection is reasonably assured.
      The
      Company records deferred revenue for payments received from customers for the
      performance of future services and recognizes the associated revenue in the
      period that the services are performed. Provision for discounts and rebates
      to
      customers and other adjustments, if any, are provided for in the same period
      the
      related sales 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 $298,684 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.


p)**
              Restatement
 During
          2008, the Company discovered an error in the recognition of revenues relating
          to
          prepaid internet service contracts. Additionally, the Company discovered
          that it
          assumed additional obligations relating to prepaid service contracts in
          the
          acquisition of Jinan Broadband. Prior to the discovery, revenue from internet
          service contracts was recorded in the period received. The Company has
          restated
          it financial statements to:
  ·
                Recognize
                    deferred revenue assumed in the Jinan Broadband acquisition as
                    of April 1,
                    2007,
 ·
                Recognize
                    revenue under internet service contracts during the period that
                    service is
                    provided,
 ·
                Recognize
                    additional purchase price due to the deferred revenue assumed
                    in the Jinan
                    acquisition, and
 ·
                Recognize
                    additional amortization expense related to the Service Agreement,
                    allocation to minority interest and income tax effect of the
                    revenue and
                    amortization adjustments.
 The
            effect of the restatement is as follows:
  *Balance
                      sheet amounts*
                  
                  As
                      Previously
                    Reported
                  
                  Adjustments
                  
                  As
                      RestatedIntangible
                      assets
                  
                  $
                  670,478
                  
                  $
                  1,310,829
                  
                  $
                  1,981,307Total
                      assets
                  
                  $
                  12,343,949
                  
                  $
                  1,310,829
                  
                  $
                  13,654,778Total
                      current liabilities
                  
                  $
                  4,723,678
                  
                  $
                  1,252,313
                  
                  $
                  5,975,991Deferred
                      tax liability
                  
                  $
                  124,082
                  
                  $
                  242,590
                  
                  $
                  366,672Minority
                      interest in Jinan Broadband
                  
                  $
                  4,960,601
                  
                  $
                  (80,799
                  )
                  $
                  4,879,802Accumulated
                      deficit
                  
                  $
                  8,808,146
                  
                  $
                  37,280
                  
                  $
                  8,845,426*Statement
                      of operations amounts*Revenue
                  
                  $
                  3,004,092
                  
                  $
                  (164,895
                  )
                  $
                  2,839,197Depreciation
                      and amortization
                  
                  $
                  1,718,307
                  
                  $
                  77,194
                  
                  $
                  1,795,501Minority
                      interest loss in Jinan Broadband
                  
                  $
                  358,923
                  
                  $
                  80,799
                  
                  $
                  439,722Income
                      tax benefit
                  
                  $
                  50,068
                  
                  $
                  97,887
                  
                  $
                  147,955Net
                      loss
                  
                  $
                  1,976,753
                  
                  $
                  37,280
                  
                  $
                  2,014,033


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





The
      accompanying financial statements are presented on a going concern basis. The
      Company generated a net loss of $2,014,033 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 $331,764
      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
            
            
            (410,210
            )Net
                deferred tax liability
            
            $
            (366,672
            )




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
            
            $
            (2,161,988
            )Expected
                income tax benefit at 34%
            
            
            (735,076
            )Nondeductible
                expenses
            
            
            43,662Rate-differential
                on foreign income invested indefintiely
            
            
            110,848WFOE
                NOL not recognized for indefinite reversal
            
            
            14,601Increase
                in valuation allowance
            
            
            418,010Income
                tax benefit recognized
            
            $
            (147,955
            )


**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.




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          - 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.




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