---

UNITED STATESSECURITIES
AND EXCHANGE COMMISSIONWashington, D.C. 20549

FORM 10-KSB

[X] Annual Report Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934 for the fiscal year ended November 30,
2007

[ ] Transition Report Under Section 13 or 15(d) of the
Securities Exchange Act of 1934 for the transition period from _____to _____

Commission File Number: 000-52201

ITONIS INC.(Name of small
business issuer in its charter)

|Nevada                                                               | 26-0881302                       
|-------------------------------------------------------------------- | ---------------------------------
|(State or other jurisdiction of incorporation or
      organization) | (IRS Employer Identification No.)

Sunny Palace Suite Xibahe Road Chaoyang District,
Beijing 100028 Peoples Republic of China(Address of principal
executive offices)

Issuers telephone number, including area code:+8613439671941

Securities registered under Section 12(b) of the Exchange Act:
None

Securities registered under Section 12(g) of the Exchange
Act:

Common Stock, par value $0.001 per share

Check whether the issuer is not required to file reports
pursuant to Section 13 or 15(d) of the Exchange Act.[ ]

Check whether the issuer (1) filed all reports required to be
filed by Section 13 or 15(d) of the Exchange Act during the past 12 months (or
for such shorter period that the registrant was required to file such reports),
and (2) has been subject to such filing requirements for the past 90 days.[X]
Yes[ ] No

Check if there is no disclosure of delinquent filers in response
to Item 405 of Regulation S-B contained in this form, and no disclosure will be
contained, to the best of 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.[ ]

Indicate by check mark whether the registrant is a shell company
(as defined in Rule 12b-2 of the Exchange Act).[ ] Yes[X]No

State issuers revenues for its most recent fiscal year:[X]

The aggregate market value of the voting and non-voting common
stock held by non-affiliates of the registrant on March 28, 2008 was $1,139,805,
based upon the closing price of such common stock on the OTC Bulletin Board on
March 28, 2008 of $0.024.

State the number of shares outstanding of each of the issuers
classes of common equity, as of the latest practicable date: 124,930,223
shares of common stock as of March 28, 2008.

---

Transitional Small Business Disclosure Format (check one): Yes [
] No [X]

---

ITONIS INC.

Annual Report on Form 10-KSB for the Year Ended November
30, 2007

INDEX

|REFERENCES |                                                                                                                                                   | IV
|---------- | ------------------------------------------------------------------------------------------------------------------------------------------------- | --
|PART I     |                                                                                                                                                   | 1 
|ITEM 1.    | DESCRIPTION OF BUSINESS                                                                                                                           | 1 
|ITEM 2.    | DESCRIPTION OF
      PROPERTY                                                                                                                     | 19
|ITEM 3.    | LEGAL PROCEEDINGS                                                                                                                                 | 19
|ITEM 4.    | SUBMISSION OF
      MATTERS TO A VOTE OF SECURITIES HOLDERS                                                                                       | 19
|PART II    |                                                                                                                                                   | 19
|ITEM 5.    | MARKET FOR
      COMMON EQUITY AND RELATED STOCKHOLDER MATTERS                                                                                    | 19
|ITEM 6.    | MANAGEMENT
      DISCUSSION AND ANALYSIS OR PLAN OF OPERATIONS                                                                                    | 20
|ITEM 7.    | FINANCIAL
      STATEMENTS                                                                                                                        | 27
|ITEM 8.    | CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
      ACCOUNTING AND FINANCIAL DISCLOSURE                                                        | 28
|ITEM 8A.   | CONTROLS AND
      PROCEDURES                                                                                                                     | 29
|ITEM 8B.   | OTHER INFORMATION                                                                                                                                 | 30
|PART III   |                                                                                                                                                   | 30
|ITEM 9.    | DIRECTORS,
      EXECUTIVE OFFICERS, PROMOTERS, CONTROL PERSONS AND CORPORATE GOVERNANCE;
      COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT | 30
|ITEM 10.   | EXECUTIVE
      COMPENSATION                                                                                                                      | 33
|ITEM 11.   | SECURITIES OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
      MANAGEMENT AND RELATED STOCKHOLDER MATTERS                                            | 38
|ITEM 12.   | CERTAIN
      RELATIONSHIPS AND RELATED TRANSACTIONS                                                                                              | 40
|ITEM 13.   | EXHIBITS                                                                                                                                          | 40
|ITEM 14.   | PRINCIPAL
      ACCOUNTANT FEES AND SERVICES                                                                                                      | 42

iii

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FORWARD-LOOKING STATEMENTS

This annual report on Form 10-KSB contains forward-looking
statements within the meaning of Section 27A of the Securities Act of 1933, as
amended, and Section 21E of the Securities Exchange Act of 1934, as amended.
These forward-looking statements involve risks and uncertainties, including
statements regarding our capital needs, business plans and expectations.
Forward-looking statements are made, without limitation, in relation to our
operating plans, our liquidity and financial condition, availability of funds,
operating costs and the market in which we compete. Any statements contained
herein that are not statements of historical facts may be deemed to be
forward-looking statements. In some cases, you can identify forward-looking
statements by terminology such as may, will, should, expect, plan,
intend, anticipate, believe, estimate, predict, potential or
continue, the negative of such terms or other comparable terminology. Actual
events or results may differ materially. In evaluating these statements, you
should consider various factors, including the risks outlined in this Annual
Report on Form 10-KSB under the section entitled Risk Factors, and in other
reports we file with the SEC. These factors may cause our actual results to
differ materially from any forward-looking statement. Given these uncertainties,
readers are cautioned not to place undue reliance on such forward-looking
statements.

REFERENCES

As used in this annual report: (i) the terms we, us, our,
ITonis and the Company mean ITonis Inc and its subsidiaries, unless the
context requires otherwise; (ii) SEC refers to the Securities and Exchange
Commission; (iii) Securities Act refers to the United States Securities Act
of 1933, as amended; (iv) Exchange Act refers to the United States
Securities Exchange Act of 1934, as amended; and (v) all dollar amounts
refer to United States dollars unless otherwise indicated.

iv

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PART I

|ITEM 1. | DESCRIPTION OF BUSINESS
|------- | -----------------------

Corporate Organization

We were incorporated on July 5, 2005 as Kenshou Inc. under the
laws of the state of Nevada.

We entered into an asset purchase agreement dated October 1,
2005 with Onyx Trading. Pursuant to this asset purchase agreement, we issued
30,000,000 post-split shares of common stock to Onyx Trading in consideration
for the acquisition of certain intellectual property owned by Onyx Trading. This
transaction was completed and the shares issued on November 16, 2005. Onyx
Trading became one of our principal shareholders upon completion of this
transaction.

On November 24, 2005, Onyx Trading sold an aggregate of
17,250,000 post-split shares of the common stock that it acquired from us to
Nicolas Lavaud, Antonin Kral and Libor Bucinsky in order to provide them with an
ownership interest in our company and a performance incentive. In these
transactions, Nicolas Lavaud purchased 6,150,000 shares of our common stock, and
Antonin Kral and Libor Bucinsky each purchased 5,550,000 shares of our common
stock. These transactions were completed pursuant to Rule 903 of Regulation S of
the Securities Act of 1933. We were not a party to these transactions.

In order to reflect our new business focus upon completion of
the Onyx Trading intellectual property acquisition, we changed our corporate
name from Kenshou Inc. to ITonis Inc. effective December 2, 2005.

In order to be able to develop the intellectual property
purchased from Onyx Trading, we commenced the process of incorporating a wholly
owned Czech subsidiary called ITonis CZ on November 25, 2005. The
incorporation process was formally completed under the law of the Czech Republic
on January 4, 2006.

We entered into an asset purchase agreement dated January 31,
2006 with Nordic IPTV (named Makeitwork ApS at the time of the agreement).
Pursuant to this asset purchase agreement, we issued 18,000,000 post-split
shares of common stock to Nordic IPTV in consideration for the acquisition of
certain intellectual property owned by Nordic IPTV. This transaction was
completed and the shares issued on February 7, 2006. Nordic IPTV became one of
our principal shareholders upon the completion of this transaction.

Concurrent with the completion of the asset purchase
transaction, we entered into a reseller and consulting service agreement with
Nordic IPTV dated February 7, 2006. Under this agreement, Nordic IPTV was
appointed as our agent to promote and resell our products and services in
Europe.

We completed a one for two consolidation of our issued and
outstanding shares of common stock on June 15, 2006. We completed a three for
one forward stock split of our authorized and issued and outstanding shares of
common stock on March 20, 2007. All information presented in this annual report
takes into consideration the consolidation and forward split of our shares of
common stock, including all share amounts and per share prices.

In July 2007, under new management, we determined to shift our
efforts for commercialization of our solution from the European market to the
Chinese market. On January 21, 2008, we entered into an amended and restated
share purchase agreement (which amended and restated the terms of the share
purchase agreement we entered into on October 28, 2007) with iOcean Media
Limited to acquire its wholly-owned subsidiary Aquos Media Limited, which is in
the business of assembling licenses and permits for Internet television (IPTV)
broadcasting in China. We completed the acquisition on January 29, 2008. For
more information on the acquisition, see Description of Business  Recent
Developments below.

1

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On December 14, 2007, we entered into a definitive joint
cooperation agreement with Beijing Lushi (SDTV) Pilot Media Co. Ltd. (Pilot
Media), a company organized under the laws of the Peoples Republic of China to
establish an online television network platform in China. For more information,
see Description of Business  Recent Developments below.

On December 31, 2007, due to the minimal level of acceptance of
our ITonis video solution and our determination to focus on the Chinese market,
we placed ITonis CZ into liquidation.

On January 15, 2008, we entered into a definitive share
purchase agreement with Niu Xhengping and Wu Jiping for the acquisition of their
company, Beijing Tuo Jiang Culture Development Ltd., which is organized under
the laws of the Peoples Republic of China, to enable us to comply with certain
Chinese laws in connection with the joint cooperation agreement we entered into
with Pilot Media. For more information, see Description of Business  Recent
Developments below.

As a result, our business is now focused on the development of
a national IPTV platform in China with Pilot Media.

Principal Executive Offices

Commencing March 2008, our principal executive offices were
re-located to leased premises at Sunny Palace, Suite B2-1202, Xibahe Road,
Chaoyang District, Beijing 100028, Peoples Republic of China. Relocation of the
principal office to Beijing will allow us to focus on the implementation and
roll-out of the IPTV platform in China. Our Chinese Partner, Pilot Media, is
taking 6,000 square feet of office space (still in the process of build-out) in
the Beijing Cultural Creative Industry Centre, owned by the State Administration
for Film and Television (SARFT), and will also be making office space available
there to us to develop content for the IPTV platform.

Recent Developments

Disposition of our ITonis Video Solution

We were the owner of a suite of proprietary software
applications that we referred to as the ITonis video solution. The ITonis
video solution enabled the on-demand delivery of video content, including
television channels and videos, to consumers by a broadband Internet for viewing
on their television sets. Due to the minimal level of acceptable of our ITonis
video solution by the market, on December 31, 2007, we placed ITonis CZ into
liquidation and, as a result, we no longer own this technology.

Joint Cooperation Agreement with Pilot Media

On December 14, 2007, we executed a binding, definitive joint
cooperation agreement (the Joint Cooperation Agreement) with Beijing Lushi
(SDTV) Pilot Media Co., Ltd., a company organized and validly existing under the
laws of the Peoples Republic of China. The following summary of the Joint
Cooperation Agreement does not purport to be complete and is qualified in its
entirety by reference to the Joint Cooperation Agreement (titled flOw TV Joint
Cooperation Contract), a copy of which has been filed with the SEC.

The Joint Cooperation Agreement establishes an online
television network platform in China. Under the joint cooperation, Pilot Media
is responsible for providing the television network platform, assembling the
necessary licenses and permits and operational management of the joint
cooperation and the Company is responsible for financing, business development
and intellectual property. The Company is required to raise $15,000,000 by June
1, 2008, for the implementation of the internet television platform. The Company
has operational control of the joint cooperation.

Material terms of this agreement include the following:

2

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- The stated objectives of the Joint Cooperation Agreement are to strengthen
  the economic and technical cooperation between the two parties and sell a
  complete Internet television platform solution (the IPTV Platform) and to
  exploit the IPTV Platform throughout China.
- The business scope of the joint cooperation is to create a robust IPTV
  platform for distribution of television programming over the Internet
  throughout China, to market and sell the IPTV Platform throughout China and to
  maximize revenues by creating innovative economic sales and advertising models
  for the IPTV Platform.
- An initial investment of $15,000,000 is required, which we are required to
  contribute by no later than June 1, 2008.
- Pilot Media will not be required to contribute any cash and will hold a 40%
  interest in the Joint Cooperation.
- We will hold a 60% interest in the Joint Cooperation, provided that we will
  allocate an interest in the Joint Cooperation through the issuance of shares
  of our common stock to the management of Pilot Media.
- Pilot Medias management will ultimately hold a 20% interest in the Joint
  Cooperation by virtue of owning a 10% interest in ITonis.
- Pilot Media will be obligated to secure certain agreed upon licenses for
  the Joint Cooperation, including a business license, an Internet content
  provision license, a network culture operation license and an information
  network video/ audio program license. These licenses must be obtained within
  100 days of the execution of the Joint Cooperation Agreement. In addition,
  Pilot Media will be obligated to file applications in connection with the
  establishment of the business of the Joint Cooperation and employ local
  personnel as required for the operation of the business of the Joint
  Cooperation.

We are obligated to pay a deposit of $150,000, which was paid
on January 25, 2008. The deposit will be returned to us if the licenses are not
obtained within the 100 day period from the execution of the agreement. If the
licenses are obtained within this period, the deposit will belong to Pilot Media
and will be applied towards the $15,000,000 investment amount if the investment
amount is raised by June 1, 2008.

We have agreed to provide equipment and technology for the IPTV
Platform, manage matters that the Joint Cooperation may prescribe (such as
equipment purchases abroad) and develop IPTV content, license content and create
an advertising based revenue generator for the IPTV Platform.

We have agreed to provide a license of the technology for the
IPTV Platform to the Joint Cooperation on an exclusive basis within China, and a
non-exclusive basis with respect to the rest of the world. In order to
accomplish this, we are presently in discussions with prospective suppliers of
such technology with a view toward our licensing or acquiring this
technology.

The Joint Cooperation will be governed by a supervisory
committee consisting of seven supervisors, four who will be nominated by us and
three who will be nominated by Pilot Media.

The net profit of the Joint Cooperation will be divided between
Pilot Media and us, with Pilot Media receiving 40% and us receiving 60%. Of the
amount that we receive, 20% will ultimately be allocated to the management of
Pilot Media through shares of ITonis that are to be acquired by management of
Pilot Media.

The Joint Cooperation shall cover a term of 20 years.

3

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There is no assurance that Pilot Media will be able to obtain
the required licenses and permits, nor that the Company will be able to raise
the $15,000,000 it is required to raise for the implementation of the internet
television platform.

Agreement to Acquire Beijing Tuo Jiang Culture
Development Ltd.

On January 15, 2008, we executed a binding, definitive share
purchase agreement (the Beijing Share Purchase Agreement) with Niu Zhengping
and Wu Jiping, individually, for the acquisition of their company, Beijing Tuo
Jiang Culture Development Ltd. (BTJCD), a company organized and validly
existing under the laws of China. The following summary of the Beijing Share
Purchase Agreement does not purport to be complete and is qualified in its
entirety by reference to the Beijing Share Purchase Agreement, a copy of which
has been filed with the SEC.

Under the Joint Cooperation Agreement, we must utilize a
Chinese subsidiary to operate in China. The lead time for creating a new company
in China is approximately six months, while the lead time for the acquisition of
an existing company is three months. Therefore, we decided to acquire an
existing company. The vendors agreed to sell BTJCD in exchange for 1,000,000
shares of our common stock, and $610,000 cash. Among BTJCDs assets are $300,000
in cash, made immediately available to the Company for use in China for Company
purposes, which is prior to the expected closing of the purchase of BTJCD on or
about June 1, 2008, and two automobiles valued in excess of $100,000. BTJCD will
be 100% owned by a Hong Kong company to be established by us, which in turn will
be 100% owned by Aquos, which is 100% owned by us. These companies, and their
places of organization, are necessary for us to effectively transfer our
earnings from the Chinese business to our bank accounts in the United
States.

There is no assurance that the acquisition of BTJCD will be
completed by June 1, 2008, due to the number of regulatory approvals required in
China.

Acquisition of Aquos Media Limited

On January 21, 2008, we entered into an amended and restated
share purchase agreement (the Amended Share Purchase Agreement) with iOcean
Media Limited (iOcean) and Aquos Media Limited (Aquos), a wholly owned
subsidiary of iOcean organized under the laws of the British Virgin Islands,
pursuant to which we agreed to amended and restated terms for our acquisition of
Aquos. The Amended Share Purchase Agreement replaces and supersedes the original
share purchase agreement that we entered into with iOcean and Aquos on October
23, 2007 (the Original Share Purchase Agreement). iOcean, through Aquos, was
engaged in the business of assembling licenses and permits for internet
television broadcasting in China. As part of its business efforts, iOcean
entered into a binding agreement with Pilot Media for a joint cooperation
between the parties. Under the Original Share Purchase Agreement, we agreed to
purchase all of the issued and outstanding share capital of Aquos (and,
therefore, the rights to the joint cooperation with Pilot Media) in
consideration of the issue to iOcean of 70,340,800 shares of our common stock.
We disclosed the completion of this acquisition and the issuance of these shares
on our Current Report on Form 8-K filed with the Securities and Exchange
Commission on October 29, 2007. Under the terms of the Amended Share Purchase
Agreement, we have agreed that the acquisition of Aquos will be completed in
consideration for the issuance of 16,138,370 shares of our common stock. We
agreed with iOcean that the acquisition of Aquos would complete on January 29,
2008, not October 26, 2007, as previously disclosed. We further agreed that the
Original Share Purchase Agreement was replaced and superseded in whole by the
Amended Share Purchase Agreement. The proposed issuance of 70,340,800 shares to
iOcean contemplated under the Original Share Purchase Agreement did not, in
fact, occur.

Overview of Our Business

We were in the business of commercializing our ITonis video
solution which enabled the on-demand delivery of video content, including
television channels and videos, to consumers via broadband Internet for viewing
on their television sets. However, due to the minimal level of acceptance of our
ITonis Video Solution by the market, on December 31, 2007, we placed ITonis CZ
(which held the ITonis Video

4

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Solution assets) into liquidation. As a result, we no longer
  own the ITonis Video Solution assets.

Since August 2007, through iOceans and Aquos, we had been in
negotiations with the second largest television broadcaster in China, Shandong
Television (SDTV), to develop a national IPTV platform for China. On December
14, 2007, we entered into a joint cooperation agreement with Pilot Media, a
wholly owned subsidiary of SDTV, to establish an online IPTV platform in China.
See Description of Business Recent Developments for more information on the
joint cooperation agreement.

In order to comply with Chinese laws in connection with the
joint cooperation agreement, we have entered into the Beijing Share Purchase
Agreement to acquire a Chinese subsidiary to operate in China. We expect to
complete this acquisition on or about June 1, 2008. In addition, our wholly
owned subsidiary, Aquos, is involved in the establishment of an IPTV platform in
China.

China is widely regarded as the worlds fastest growing IPTV
market and offers a unique business growth opportunity for us. Development of
relevant technology solutions and build-out of the IPTV platform in conjunction
with SDTV now forms a major component of our business strategy.

SDTV, through its subsidiary Pilot Media, is currently in the
process of obtaining all necessary governmental approvals for a national
roll-out during 2008 of the China IPTV platform in conjunction with us. The
business venture will be an Internet-based television portal that we expect will
eventually deliver over 150 foreign and domestic channels nationwide. Licensed
by the State Administration for Film and Television, broadcasting is scheduled
to commence in June 2008, subject to financing.

Industry Background

Broadband Internet

Broadband Internet refers to the ability to access the Internet
at high speeds of data connection. These data speeds are measured in terms of
kilobits per second (kbps) (i.e. 1000 bits of data information per second) per
second and megabits per second (mbps) (i.e. 1,000,000 bits of data information
per second). Broadband Internet generally refers to data speeds in excess of 2
mbps. At these data speeds, it becomes possible to stream video content to
consumers via the Internet from computer servers that have been configured and
programmed to deliver video streaming.

Broadband Internet connections are becoming increasingly
available to consumers as telecommunication companies throughout the world
expand their ability to deliver broadband Internet via cable, digital fiber and
ADSL connections. As the market penetration of broadband Internet increases, the
number of potential consumers for a technology solution that enables the
delivery of video content via the Internet increases. Accordingly, as rates of
broadband Internet access increase amongst consumers, a market opportunity is
generated to provide on-demand video content to these consumers via the
Internet.

Video Content

We believe that there is considerable global demand among
consumers, particularly in China, for the delivery of content which could be
satisfied by delivery of on-demand video content via the Internet, including:

Movies And DVDs

There is a demand among consumers for the ability to watch
movies and other digital video discs (DVDs) on their PCs and televisions.
This demand is presently satisfied by a combination of DVD rental stores and
on-demand services available to some consumers through cable and satellite
television services. The ability to offer movies and DVDs to consumers via the
Internet presents a new opportunity for Internet service providers and others to
offer movies and DVDs on demand to their customers.

5

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Internet Television

Delivery of television services has historically been a closed
market where delivery was completed by local television broadcast companies or
by a limited number of cable companies and satellite television companies. The
ability to deliver television via the Internet offers the ability for companies
engaged in the business of providing Internet services to offer television via
the Internet. In addition, new services can be added to conventional television
services due to the digital delivery format of television delivered via the
Internet.

Virtual Video Recorder

There is a demand among consumers for the ability to record
televisions shows that are broadcast when the consumer is not available in order
that the consumer can watch the program at a later, more convenient time. This
demand is demonstrated by the recent popularity of personal video recorders,
such as TiVo, that enable consumers to record programs to a computer hard disk
and replay the programs at a later time. We believe that there is potential
demand for a virtual video recorder that would enable consumers to record
television programs via the Internet using a television set-top box device, or
other electronic device with Internet access, such as a personal computer or a
mobile telephone. A virtual video recorder would remove the requirement that
the consumer have purchased a device with a computer hard disk as the data would
be stored on the servers of the provider of the Internet video services.

TV In The Past

TV In The Past is a service related to a virtual video recorder
that enables consumers to have the ability to access television programs that
have been broadcast during a recent period. The advantage of TV In The Past is
that a consumer would not have to pre-program the recording of the television
program, as with the virtual video recorder. The provider of the Internet video
services would provide the consumer with the ability to select and view recent
television programs that have been broadcast and stored on the servers of the
provider of the Internet video services.

Content Owners

The video content that consumers will demand and that may be
delivered via the Internet is owned by the creators of this video content and
their licensees. The ownership of the video content and the rights to distribute
the video content are the subject to intellectual property laws that will
prohibit the unauthorized transmission or copying of the video content.
Accordingly, any solution for the delivery of on-demand video content via the
Internet must be deployed by the owners of the intellectual property rights to
distribute the video content or under contractual agreement with the owners of
these intellectual property rights.

Digital Rights Management

The incorporation of digital rights management is a key
element of the success of any service that attempts to deliver video on demand
via the Internet. Digital rights management refers to encryption techniques that
are used in order to ensure that the video content that is delivered to
consumers via the Internet is not copied without authorization from the owner of
the intellectual property rights to the video content that has been delivered.
We anticipate that owners of video content who authorize the delivery of video
content via the Internet will insist on digital rights management features being
incorporated into any technology solution that is used to deliver licensed video
content via the Internet.

Our Business

Our primary business is the development and growth of an IPTV
platform in China which we refer to as ChinaTV-Net, a joint cooperation with
Pilot Media, to establish a nationwide, government-licensed IPTV network in
China. Subject to financing, ChinaTV-Net is proposed to cover the full spectrum
of IPTV

6

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broadcasting  infrastructure; technology; content acquisition
and creation; advertising sales and partnerships; and merchandise sales.

Our ability to implement our plan of operations under the Joint
Cooperation Agreement and participate in the ChinaTV-Net business is subject to
our being able to meet our funding obligations under the Joint Cooperation
Agreement. While we are presently working towards securing this funding, this is
no assurance that we will be able to meet this funding requirement. Accordingly,
there is no assurance that we will be able to execute in on the business plan
for ChinaTV-Net described below.

Corporate Structure

ChinaTV-Net is a Chinese business entity, owned by Pilot Media.
Under the Joint Cooperation Agreement, Pilot Media is providing ChinaTV-Net to
the joint cooperation. It is proposed that ChinaTV-Net will launch in China a
wide range of IPTV programming consisting of films, sports, and entertainment,
including premium entertainment channels, video on demand movies, television
shows, and films in foreign and Chinese languages.

In order to comply with Chinese regulatory requirements, ITonis
will operate in China through a wholly owned Chinese registered subsidiary which
will essentially be a transparent pass-through to ITonis. This subsidiary is
necessary in order to comply with Chinese government regulations. Within
ChinaTV-Net, ITonis is expected to provide the bulk of the IPTV technology,
including middleware, streaming and storage components, digital rights
management, and player development. ITonis will also take the lead on acquiring
and creating content to augment the 30 channels that SDTV is already delivering
to its 80 million traditional cable TV customers. ITonis is also responsible for
obtaining the necessary funding from institutional investors to fund the cash
needs of ChinaTV-Net.

SDTV provides a strong position with the Chinese central
government, as well as its considerable existing broadcasting, technical,
production, and administrative infrastructure. A major component of the
government relationships being leveraged by SDTV is the issuing of a number of
critical licenses to ChinaTV-Net, which are required to operate as a nationwide
IPTV broadcaster. The most significant licenses are listed in the following
table. Most of these licenses have already been obtained, while some are still
in the approval process. These licenses will be necessary for the implementation
of the ChinaTV-Net business.

|License                   | Licensee    | Issuer/Regulator        | Main provisions                          
|------------------------- | ----------- | ----------------------- | -----------------------------------------
|                          |             |                         |                                          
|Business License          | ChinaTV-Net | Bureau of Industry and  | o Normal business registration           
|                          |             | Commerce                |                                          
|                          |             |                         |                                          
|Internet Content Provider | ChinaTV-Net | Ministry of Information | o Permits hosting of a .cn
      suffix
|(ICP) License             |             | Industry (MII)          | website, provision of content but        
|                          |             |                         | not broadcasting.                        
|                          |             |                         |                                          
|Value-added Network       | ChinaTV-Net | MII                     | o Permits charging for VAS and           
|Service Provider (SP)     |             |                         | content on Internet or mobile            
|License                   |             |                         | phones but not broadcasting.             
|                          |             |                         | o Requirement for prescribed
      level 
|                          |             |                         | of capital and minimum 5 offices         
|                          |             |                         | in China.                                
|                          |             |                         |                                          
|Network Culture           | Pilot Media | Ministry of Culture     | o Must conform to PRC
      censorship   
|Operating License         |             |                         | laws.                                    
|                          |             |                         |                                          
|Information Network       | Pilot Media | SARFT                   | o Permits broadcasting of video
      and
|Video/Audio Program       |             |                         | audio over the Internet.                 
|(IPTV) License            |             |                         |                                          
|                          |             |                         |                                          
|                          |             |                         |                                          
|Film and TV Production    | ChinaTV-Net | SARFT                   | o Permits purchase and
      distribution
|License                   |             |                         | in China of foreign content              

7

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- ChinaTV-Netis planned to be the broadcasting entity that aggregates
  and distributes the programming feeds, controlled 60% by ITonis and 40% by
  Pilot Media.
- ITonis China Company:ITonis is in the process of acquiring a
  Beijing company, Beijing Tuo Jiang Culture Development Ltd., which will be a
  wholly-owned foreign enterprise (WOFE). 60% of revenues generated by
  ChinaTV-Net will flow to the WOFE for reinvestment in the project or
  disbursement to ITonis in accordance with needs of the business, as
  contemplated under the Joint Cooperation Agreement.
- Shandong Television (SDTV)is one of the three largest Chinese
  state-owned cable television companies. SDTV broadcasts 30 channels to over 80
  million people each day.
- Pilot Mediais a profit-making Beijing corporation formed for the
  purpose of this project and is wholly-owned by SDTV. Pilot is essentially a
  division of SDTV that will carry out the operational efforts required to work
  with ITonis to create and run ChinaTV-Net. Pilot has access to the large asset
  base of SDTV, including the fiber and copper wire network that is the backbone
  of the companys cable TV system, the existing 30 channel TV feed, technical
  workers, the marketing department to promote ChinaTV-Net, and the physical
  plant including office and lab space. Pilot and SDTV are listed separately as
  participants in the ChinaTV-Net business for corporate governance reasons.

Together with Pilot Media, we plan to create four different
major divisions within ChinaTV-Net, as follows:

(1) Broadcasting is proposed to be the division of
ChinaTV-Net that plans the broadcasting of content and is responsible for
actually doing the broadcasting. ChinaTV-Net Broadcasting thus undertakes all of
the real-time activities associated with a television network, as well as the
delivery and maintenance of the interactive components of ChinaTV-Nets IPTV
platform. In addition, ChinaTV-Net Broadcasting deals with the customers,
including billing and customer service.

(2) Technology is proposed to be the division of
ChinaTV-Net that creates and maintains the Internet Protocol (IP) technology
infrastructure that allows the ChinaTV-Net broadcast signal to be delivered via
the Internet. It is expected that ChinaTV-Net Technology will be largely
comprised of the assets and skills that ITonis brings to the ChinaTV-Net
venture, namely hardware and software for media acquisition, storage, streaming
video, digital rights management, and watermarking.

(3) Advertising is proposed to be the advertising sales
division of ChinaTV-Net. The ChinaTV-Net broadcasting network is expected to
create a very valuable inventory of advertising space that will engage the
viewing of millions of high value Chinese consumers. ChinaTV-Net Advertising
expects to cultivate relationships with large domestic and international
advertisers to further monetize the audience for ChinaTV-Nets programming.

(4) Channel is proposed to be the content acquisition
division of ChinaTV-Net, and wil focus on acquiring, developing, and delivering
foreign (non-Chinese) content for broadcast on ChinaTV-Net. Chinese television
viewers are greatly limited in the number of content options available to them.
Most content is domestically generated, leaving a vast unmet demand for western
entertainment and information programming. ChinaTV-Net Channel proposes to
develop partnerships with western content companies to create programming
options. ChinaTV-Net Channel also plans to produce on-screen gambling
entertainment and original Chinese language content.

Content Strategy

ChinaTV-Nets programming is proposed to contain a mix of
Chinese and foreign content, designed to provide a selection that goes far
beyond what is currently available to the Chinese viewer, as well as to
incorporate the interactivity of IPTV. At the time of launch, ChinaTV-Nets
content is planned to be a mix

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of 80 existing Chinese language channels, 30 of which are
already being carried by SDTV, and the rest of which will be sourced from other
provinces. ChinaTV-Net proposes to broadcast a total of 150 channels by the end
of 2009  the initial 80 domestic channels, plus 70 foreign and complementary
domestic channels. A further 50 audio channels are also planned to be launched
by the end of 2009.

New Chinese content channels beyond the initial 80 are proposed
to be broadcast under the ChinaTV-Net brand name. Some of these channels are
expected to be created as high-interactivity complements to existing SDTV
channels, while others will be completely new channels. The interactivity will
allow ChinaTV-Net to exploit the full capabilities of the IPTV medium, defining
clearly the differentiation between ChinaTV-Nets IPTV platform and standard
cable TV. The production of the original content for the new channels is
expected to be done largely in China (as required by law), and is expected to
draw upon ChinaTV-Nets strong existing ties to China Film Group  essentially
the Chinese state-owned film studio and distribution company.

Foreign Content and Channels

ChinaTV-Nets ability to deliver a robust package of foreign
content will be one of its strongest drawing cards with Chinese viewers. These
consumers are experiencing their lifestyle being drawn into the twenty-first
century due to the growing affluence created by Chinas dramatic economic
growth. A major part of this lifestyle change is enhanced access to information
about the rest of the world. As a result, Chinese consumers have been exposed to
modern conveniences and recreations available in places like the United States,
and they want to get a bigger piece of them. It follows that they want to be
able to access content that appeals to them, and they want a much greater number
of options from which to choose in finding content that appeals to them.

At present, Chinese TV channels are allowed by law to purchase
foreign programming on a one off basis. But they are not allowed to have a
full channel for this programming, nor can they brand a foreign broadcasting
channel. For example, they are not allowed to create a Disney Channel China.
However, this law does not appear apply to the new medium of IPTV, so
ChinaTV-Net may present an option for bringing foreign channels into China, with
branding and without a requirement that a large portion of the content be
Chinese-produced, although there is no assurance that government regulation will
not be expanded or interpreted to apply to IPTV.

ITonis plans to work with some of the largest sports, animation
and film broadcasters in the United States, Europe, and Asia with a view to
acquiring exclusive non-Chinese (foreign) sports, films and childrens
television content. ChinaTV-Net currently hopes to offer branded foreign content
providers their only real opportunity to reach the Chinese market.

It is our plan that foreign channels will be offered on
ChinaTV-Net by subscription at first, but eventually may be offered for free as
the advertising revenue reaches levels that make such a move a value-creating
choice. The business arrangement ITonis envisions for foreign channels is
through partnership with the ChinaTV-Net Channel subsidiary, with joint
ownership of the channels. ITonis views the potential of the foreign channels as
one of the greatest opportunities for its revenue and income growth.

In addition to branded channels devoted to foreign content,
ChinaTV-Net plans to offer premium content for view on a pay per view, on-demand
basis. The interactive IPTV platform enables ChinaTV-Net viewers to choose from
a large catalog of movies and other content that can be accessed and purchased
for viewing at any time. Given that there is an entire world of premium content,
developed over many years, that has been largely unavailable to the Chinese
market, there is great potential in capturing Chinese viewers attention and
unlocking their pent-up demand to view this content for a small fee.

Football Broadcasts

Interest in soccer in China has been increasing greatly. In
particular, the English Premier League has become a phenomenon amongst Chinese
football enthusiasts. However, most Premier League matches are

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not available on live TV. The matches that are available
attract audiences ranging from 100 million to 360 million. Through a
relationship which one of ITonis significant shareholders, iOcean Media
Limited, has with the Premier League, ITonis is hoping to bring live broadcast
of all Premier League matches to its viewers as one of ChinaTV-Nets premium
content options.

Roll-Out and Expansion

ChinaTV-Net plans to launch broadcasting in 2008 with
approximately 80 Chinese channels, aggregated from the countrys 36 provinces.
The target is to have service rolled out nationwide within one year.

Under this plan, each viewer who signs up under the ChinaTV-Net
platform will automatically become a subscriber to the basic 80 channel domestic
cable TV service, which is offered for free. ChinaTV-Net anticipates that
offering the basic service for free will attract many more viewers to its
platform  viewers who are well-positioned for upselling of premium paid
products and services.

Basic Paid Channels

Premium paid channels offering high-demand domestic content, as
well as foreign content, are planned to be offered on a pay-per-day basis. The
price will amount to $0.10 per viewer per day, and ChinaTV-Net conservatively
projects that 2% of its viewers will take part in these channels each day. The
pay-per-day model reflects the Chinese consumers tendency to pay for products
and services in small amounts, rather than signing up for long-term contracts
with higher absolute expenditures but lower unit costs.

Football Package

ChinaTV-Nets football viewing package is expected to be a
significant component of the networks IPTV programming choices. Ideally
positioned to align with the interests of the many football enthusiasts across
China, the premium football viewing package is expected to be ChinaTV-Nets
largest revenue generator for the foreseeable future. It is proposed that the
package will offer viewers the ability to see every English Premier League
football match, as well as other leagues in the future. Additionally, it is
planned that the interactivity features of ChinaTV-Net will be used to allow
viewers to access the full database of licensed Premier League information,
statistics, photos, etc.

Premium Pay-Per-View Content

ChinaTV-Net is proposed to offer interactive access to
video-on-demand (VOD) programming, consisting of first-run movies, a catalog of
movies and TV shows, and other premium content. This premium content will be
available for purchase on a per-program basis, for $1.00, and as a monthly
package for $6.00.

Advertising

ChinaTV-Net is expected to sell advertising of various types on
its IPTV platform. A large portion of these proposed advertising will be in the
form of 30 second video spots, airing on the basic subscription TV channels it
will deliver. In addition, there are proposed to be Internet-style advertising
on the interactive portions of the ChinaTV-Net platform, with strong targeting
capabilities.

Other Revenue Sources

Additional sources of potential revenue include the offering of
private channels for personal or business use and merchandise sales. Much like
blogs, these channels could give individuals and companies the opportunity to
have their voices heard on an ongoing basis  either for a fee or with
advertising support.

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Our Market Opportunity

We believe that content owners and distributors will be looking
at working together to deliver video content to a growing number of consumers on
the Internet. The ability of consumers to connect to the Internet presents a
market opportunity to deliver the following on-demand video content to consumers
via the Internet:

- Movies and DVDs
- Internet Television
- Virtual Video Recorder
- TV in the Past

Our market opportunity is to develop and deliver a technology
solution that enables the on-demand delivery of this video content to consumers
via the Internet that respects the ownership rights of the video content owners
and incorporates digital rights management features. We believe that our ability
to do this in China is greatly enhanced by our formal partnership with a major
existing cable and satellite television company (SDTV), supported by Central
Government licensing, which is currently being processed.

Development

Initially, the IPTV broadcasting service is planned to roll-out
using peer-to-peer (P2P) technology. P2P is a communications model in which
each party has the same capabilities and either party can initiate a
communication session. Other models with which it might be contrasted include
the client/server model or the master/slave model. In some cases, P2P
communications is implemented by giving each communication node both server and
client capabilities. In recent usage, peer-to-peer has come to describe
applications in which users can use the Internet to exchange files with each
other directly or through a mediating server.

On the Internet, P2P is a type of transient Internet network
that allows a group of computer users with the same networking program to
connect with each other and directly access files from each others hard drives.
In the West, there has been considerable, highly publicized, concern from major
producers of content, including record companies, about what they consider
illegal sharing of copyrighted content resulting in numerous legal actions
against P2P users. Meanwhile, corporations are nevertheless also looking at the
advantages of using P2P as a way to share files without the expense involved in
maintaining a centralized server and as a way for businesses to exchange
information with each other directly. P2P networks are often used in scientific
and grid computing as well. In China, P2P remains more or less the standard
technology for roll-out of new media content provision models such as IPTV and
ITonis is in discussions with a leading Chinese P2P technology company. Under
the Joint Cooperation Agreement, we are required to provide this to the joint
cooperation. Accordingly, we are presently in discussions with potential
suppliers of such technology with a view towards acquiring the right to its use.

Internet P2P Program

To use P2P technology, the user must first download and execute
a peer-to-peer client application (program). This program is capable of fetching
the initial list of potential peers (seed list), these peers are used as a root
of graph describing the P2P network. This network itself is then used for other
node discovery and media delivery. Some nodes have specific semantics. They are
used by the service provider as media seeds and act as sources of the
transmitted media.

Our Market

China has the worlds largest television audience, the greatest
number of cable television households, and the second most Internet users and
broadband users (and is rapidly overtaking the United States in both of these
categories.) The Chinese government has mandated that Digital TV will be made
the nationwide

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standard for cable television by 2015. This transition will
mean more domestic television channels and even higher revenues for
broadcasters.

China currently ranks third in the world behind the United
States and Japan in media spending and is projected by PriceWaterhouseCoopers to
take over the number two spot from Japan in 2008. The firm says that China's
growth will result from increases in disposable income and be fueled largely by
increases in pay-TV services, internet advertising, merchandising and other
online services. This explosive growth in the Chinese media market aligns with
ITonis business model, which consists of:

- A large package of local Chinese channels, offered for free
- Standard pay-channel packages
- Premium pay-channels, including Chinese versions of foreign content
- Premium sports packages (featuring English Premier League football/soccer,
  as well as American sports)
- Television-style and interactive advertising
- Personal TV, industrial/enterprise private and public channels, video
  blogs (giving viewers room to invent their own new media methods)
- Hand-held box TV/cell phone/MP4/MP3
- Merchandise sales

Employees

At the date of this annual report, the sole employees of ITonis
Inc were: Tom Roberts, Antonin Kral, and Larry Haber.

Following completion of negotiations with SDTV in China, the
roll-out of the IPTV business in China will entail a significant increase in
employees for the China business. These additional employees will be employed
directly by the China operating company.

Intellectual Property

We do not currently own any intellectual property, other than
  limited intellectual property rights relating to the Itonis video solution that
  are not material to us and have been licensed to a third party.

Government Regulation

All television broadcasters, including IPTV, are required to
have broadcasting licenses, which allows the government to maintain control over
content and information of broadcasters. To date, only a handful of such IPTV
licenses have been issued. The first license belongs to Chinese Central
Television (CCTV), which is government-owned and the only national TV network.
CCTV is not using its license and was only issued the license because, as the
governments central television network, it must have a license if such licenses
are being granted to other broadcasters  even if it does not intend to use the
license. The Chinese government is nevertheless actively promoting the creation
of a completely new licensed national IPTV network over which it has control,
but which is run more like a western-style broadcaster. New regulations were
jointly introduced by the Ministry of Information and the State Administration
for Radio Film and Television (SARFT) on January 31, 2008, which can be
summarized as follows:

- IPTV Licence can only be issued to a State-Owned or State-Controlled
  entity, such as our partner, Pilot Media.
- A programme making (production) licence is also required  Pilot Media has
  one.
- For news channels, approval from the State Council News Office is required
   Pilot Media has this approval.
- Most existing online video websites do not fulfill the new requirements
  and even if they have SP licences, they have to quickly become compliant or
  will probably be closed down.

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- Another key aspect of the new regulations is that, not only is the
  Government cracking down on unlicensed companies, but they will actively
  support those companies which are aligned with a traditional TV station (e.g.
  Pilot Media/SDTV).
- These new regulations are key to the rationale behind our cooperation with
  Pilot Media, which is able to provide the necessary approvals under the Joint
  Cooperation Agreement.
- The new regulations reflect the PRC Governments increasing understanding
  of new media (internet and online video in particular) and its growing
  potential in China  there are already 210 million mainland Chinese online and
  this figure is rapidly increasing.

Risk Factors

An investment in our common stock involves a high degree of
risk. You should carefully consider the risks described below and the other
information in this annual report before investing in our shares of common
stock. If any of the following risks occur, our business, operating results and
financial condition could be seriously harmed. The trading price of our common
stock could decline due to any of these risks, and you may lose all or part of
your investment.

Risks Relating to our Business and Financial
Condition

As we have yet to commercially deploy the IPTV platform
in China, there is no assurance that we will ever achieve revenues.

Our plan of operation is focused on the commercialization of
the IPTV platform in China and its various components. While we have entered
into the Joint Cooperation Agreement with Pilot Media to enable us to achieve
this objective, there is no assurance this arrangement will enable us to carry
out our business strategy. Our ability to achieve material revenues and future
profitability will depend on our ability to complete deployment of the
ChinaTV-Net business plan and to successfully market the platform and its
various components. There is no assurance that we will be able to complete the
successful deployment of the IPTV platform, perform our obligations under the
Joint Cooperation Agreement or to implement our ChinaTV-Net business plan.

If we are unable to obtain additional financing to
execute our plan of operations, then we will not have sufficient funds with
which to carry out our plan of operations and our business will most likely
fail.

Our plan of operations is to commercialize an IPTV platform in
China and to generate material revenues from this business under the Joint
Cooperation Agreement with Pilot Media. Our obligations under the Joint
Cooperation Agreement and our planned expenditures over the next year to
implement our plan of operations for ChinaTV-Net are in excess of our current
financial resources. We have limited cash and working capital and we will not be
able to fund our operations beyond the next two months without additional
financing. Accordingly, we will require additional financing in order to carry
out our plan of operations and execute on our ChinaTV-Net business strategy. We
presently do not have any definitive arrangements for additional financing in
place and there is no assurance that we will be able to arrange for additional
financing. If we are not able to arrange for additional financing to cover these
additional anticipated expenses, we will not be able to execute our plan of
operations with the result that our business may fail and investors may lose a
substantial portion or all of their investment.

As we have a limited operating history; we may never earn
material revenues or achieve profitability.

We were incorporated on July 5, 2005 and only recently engaged
in our activities in China. Our operating history is limited, and to date we
have been involved primarily in organizational and development activities. We
have not earned material revenues to date and our ability to commercially
develop the IPTV platform is untested. Accordingly, there is no assurance that
we will ever achieve material revenues or profitability.

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We have a history of losses and negative cash
flows.

Since inception, we have not achieved material revenues and we
have incurred significant losses. Accordingly, we have a history of negative
cash flows. There is no assurance that we will be able to generate material
revenues, achieve profitably and generate positive cash flow in the future.
Further, we expect an increase in development and operating costs as we
undertake our plan of operations. Consequently, we expect to incur continued
operating losses and net cash outflows until such time as we gain market
acceptance sufficient to generate a commercially viable and sustainable level of
income, of which there can be no assurance. In addition, our ability to generate
material revenues will be subject to significant fluctuations due to many
factors not within our control, such as market acceptance of our IPTV platform,
the unpredictability of when customers will subscribe to the platforms and the
overall demand for video programming over the internet.

If our operating expenses are greater than anticipated,
then we will have less funds with which to pursue our plan of operations and our
additional financing requirements will be greater than anticipated.

We may find that the costs of carrying out our plan of
operations prior to achieving significant revenues are greater than we
anticipate. Increased operating costs will cause the amount of additional
financing that we require to increase. Investors may be more reluctant to
provide additional financing if we cannot demonstrate that we can control our
operating costs. There is no assurance that additional financing required as a
result of our operating costs being greater than anticipated will be available
to us. If we do not control our operating expenses, then we will have less funds
with which to carry out our plan of operations with the result that our business
may fail.

As there is a substantial doubt as to our ability to
continue as a going concern, there is a significant risk that our business will
fail.

In their report on our annual financial statements for the year
ended November 30, 2007, our independent auditors included explanatory
paragraphs expressing doubt about our ability to continue as a going concern.
This is due to the uncertainty of our ability to meet our current operating and
capital expenses. As a result, we caution investors that there is a risk that
our business may fail.

Substantially all of our assets and most of our directors
and officers are located outside the United States, with the result that it may
be difficult for investors to enforce within the United States any judgments
obtained against us or our directors and officers.

Substantially all of our assets are located outside the United
States and we do not currently maintain a permanent place of business within the
United States. In addition, most of our directors and officers are residents of
the Czech Republic or China, and all or a substantial portion of their assets
are located outside the United States. As a result, it may be difficult for
investors to enforce within the United States any judgments obtained against us
or our officers and directors, including judgments predicated upon the civil
liability provisions of the securities laws of the United States or any state
thereof. Consequently, you may be effectively prevented from pursuing remedies
under U.S. federal securities laws against our directors and officers.

We operate in a highly competitive industry and our
failure to compete effectively may adversely affect our ability to generate
revenue.

Our industry is highly competitive and subject to rapid change.
We expect to experience competition from companies involved in IPTV. There are a
number of companies that offer IPTV platforms, and some of our current and
potential competitors have greater technical, financial, marketing, sales and
other resources than we do. Certain of our competitors may have sufficiently
large resources so as to influence the entire market for this industry. Such
competition will potentially affect our chances of achieving profitability, with
the result that our business may fail. Furthermore, if other companies better
anticipate the direction of the market for this industry, they will have a
competitive advantage over us.

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The ability of our IPTV business plan to be successfully
deployed is contingent upon the widespread market penetration of broadband
Internet access.

A key factor for our success is the high penetration of
broadband connections to potential customers. While rates of penetration of
broadband Internet access are increasing, there is risk that penetration will
not be as high as expected. If the adoption of broadband connection is slowed
down, this would have a material negative impact on our ability to commercialize
our IPTV platform and generate revenues and positive cash flows from our
operations.

If we are not able to successfully integrate Digital Right
Management into our IPTV platform, then video content owners and distributors
may not trust our solution for the delivery of proprietary video content via the
Internet with the result that potential content suppliers may refuse to license
their content to us.

We could lose our competitive advantages if we are not
able to protect our intellectual property rights against infringement, and any
related litigation could be time-consuming and costly.

We have not achieved any trademark protection of the ITonis
names that we use in connection with our business. As we have not obtained any
trademark protection, we may not be able to prevent any competitor from adopting
the same or similar names to the names that we use.

As a result of these factors, investors should be aware that we
may be unable to protect any intellectual property rights that we have or that
we will be able to exploit the intellectual property rights that we do have in
order to secure a competitive position in the market-place.

If we fail to effectively manage our growth, our future
business results could be harmed and our managerial and operational resources
may be strained.

We expect to experience significant growth in the scope and
complexity of our business. We will need to add staff to market our services,
manage operations, handle sales, delivery and support as well as marketing
efforts and perform finance and accounting functions. We will be required to
hire a broad range of additional personnel in order to successfully manage our
operations if we are successful. This growth is likely to place a strain on our
management and operational and financial resources. The failure to develop and
implement effective systems, or to hire and retain sufficient personnel for the
performance of all of the functions necessary to effectively service and manage
our potential business, or the failure to manage growth effectively, could have
a materially adverse effect on our ability to deliver video solutions as well as
on our business and financial condition.

If we lose the services of one of our officers, then we
may not be able to carry out our plan of operations.

We are dependent upon the services of Mr. Thomas Neal Roberts,
Mr. Antonin Kral and Mr. Lawrence Haber to carry out our plan of operations. The
loss of the services of any of them could have a serious effect on our ability
to execute our business plan and succeed in commercializing our ITonis software.
We do not maintain any key man insurance on our directors or officers.

If government regulations are adopted that impose
additional costs or requirements on our operations, then our cost of operations
may be increased and we may not be able to carry out our plan of
operations.

Our industry is highly regulated in China, and both we and our
future customers and clients may be affected by changes in regulation of
telecommunication services. The indirect impact of changes in regulation could
affect our business adversely even though the specific regulations do not apply
directly to us or our products. Changing governmental regulations may impose new
and different requirements with which video content is delivered over the
Internet. We have no control over regulations and regulatory change and cannot
guarantee that our IPTV platform will meet the minimum standards as set out by
applicable future regulation. Establishing compliance may be costly and
time-consuming and our failure to do so could result in our inability to
commercialize the IPTV platform and carry out our plan of operations.

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Risks Relating to Regulation of Our Business and to Our
Structure

If the Chinese government finds that the agreements that
establish the structure for operating our business in China do not comply with
Chinese governmental restrictions on foreign investment in the advertising
industry, we could be subject to severe penalties.

If we are found to be in violation of any existing or future
Chinese laws or regulations or fail to obtain or maintain any of the required
permits or approvals, the relevant Chinese regulatory authorities, would have
broad discretion in dealing with such violations, including:

- revoking the business and operating licenses of our subsidiaries and
  affiliates in China;
- discontinuing or restricting our the operations of our subsidiaries and
  affiliates in China;
- imposing conditions or requirements with which we or our subsidiaries and
  affiliates in China may not be able to comply;
- requiring us or our subsidiaries and affiliates in China to restructure
  the relevant ownership structure or operations; or
- restricting or prohibiting our capital resources to finance our business
  and operations in China.

Further, there is no assurance that all business licenses for
the ChinaTV-Net business strategy will be obtained or that a government
authority will not take the position that the licenses obtained are not
available for the ChinaTV-Net business under our Joint Cooperation Agreement
with Pilot Media. The imposition of any of these penalties would result in a
material and adverse effect on our ability to conduct our business, as well as
our results of operations, financial condition and cash flows.

Risks Relating to the Peoples Republic of China.

Substantially all of our assets are located in China and
substantially all of our revenues are derived from our operations in China.
Accordingly, our business, financial condition, results of operations and
prospects are subject, to a significant extent, to economic, political and legal
developments in China.

The Chinese economy differs from the economies of most
developed countries in many respects, including the amount of government
involvement, level of development, growth rate, control of foreign exchange and
allocation of resources. While the Chinese economy has experienced significant
growth in the past two decades, growth has been uneven, both geographically and
among various sectors of the economy. The Chinese government has implemented
various measures to encourage economic growth and guide the allocation of
resources. Some of these measures benefit the overall Chinese economy, but may
also have a negative effect on us. Moreover, our financial condition and results
of operations may be adversely affected by government control over capital
investments or changes in tax regulations that are applicable to us.

The economic, political and social conditions in China,
as well as Chinese governmental policies, could affect the financial markets in
China and our liquidity and access to capital and our ability to operate our
business.

The Chinese economy has been transitioning from a planned
economy to a more market-oriented economy. Although the Chinese government has
implemented measures since the late 1970s emphasizing the utilization of market
forces for economic reform, the reduction of state ownership of productive
assets and the establishment of improved corporate governance in business
enterprises, a substantial portion of productive assets in China are still owned
by the Chinese government. In addition, the Chinese government continues to play
a significant role in regulating industry development by imposing industrial
policies. The Chinese government also exercises significant control over Chinas
economic growth through the allocation of resources, controlling payment of
foreign currency-denominated obligations, setting monetary policy and providing
preferential treatment to particular industries or companies. Since late 2003,
the Chinese government implemented a number of measures, such as raising bank
reserves against deposit rates to place additional limitations on the ability of
commercial banks to make loans and raise interest

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rates, in order to slow down certain segments of Chinas
economy which it believed to be overheating. These actions, as well as future
actions and policies of the Chinese government, could materially affect our
liquidity and access to capital and our ability to effectively operate our
business.

The Chinese legal system embodies uncertainties which
could limit the legal protections available to you and 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 precedential value. In 1979, the Chinese government began to
promulgate a comprehensive system of laws and regulations governing economic
matters in general. The overall effect of legislation since that time has
significantly enhanced the protections afforded to various forms of foreign
investment in China. Our operating subsidiary in China, will be a wholly
foreign-owned enterprise (WOFE) which is an enterprise incorporated in China
and wholly-owned by foreign investors. Our WOFE will be subject to laws and
regulations applicable to foreign investment in China in general and laws and
regulations applicable to wholly foreign-owned enterprises in particular.
However, these laws, regulations and legal requirements change frequently, and
their interpretation and enforcement involve uncertainties. For example, we may
have to resort to administrative and court proceedings to enforce the legal
protection that we enjoy either by law or contract. However, since Chinese
administrative and court authorities have significant discretion in interpreting
and implementing statutory and contractual terms, it may be more difficult to
evaluate the outcome of administrative and court proceedings and the level of
legal protection we enjoy than in more developed legal systems. In addition,
such uncertainties, including the inability to enforce our contracts, could
materially and adversely affect our business and operation. In addition,
intellectual property rights and confidentiality protections in China may not be
as effective as in the United States or other countries. Accordingly, we cannot
predict the effect of future developments in the Chinese legal system,
particularly with regard to the advertising industry, including the promulgation
of new laws, changes to existing laws or the interpretation or enforcement
thereof, or the pre-emption of local regulations by national laws. These
uncertainties could limit the legal protections available to us.

Restrictions on currency exchange may limit our ability
to utilize our revenues effectively.

Substantially all of our operating expenses will be denominated
in Renminbi (or yuan, the currency of China). The Renminbi is currently
convertible under the current account, which includes dividends, trade and
service-related foreign exchange transactions, but not under the capital
account, which includes foreign direct investment and loans. Currently, we may
purchase foreign exchange for settlement of current account transactions,
including payment of dividends to us, without the approval of the State
Administration of Foreign Exchange. However, we cannot assure you that the
relevant Chinese governmental authorities will not limit or eliminate our
ability to purchase foreign currencies in the future. Since a significant amount
of our future revenues will be denominated in Renminbi, any existing and future
restrictions on currency exchange may limit our ability to utilize revenues
generated in Renminbi to fund any business activities outside China, if any, or
expenditures denominated in foreign currencies. Foreign exchange transactions
under the capital account are still subject to limitations and require approvals
from, or registration with, the State Administration of Foreign Exchange and
other relevant Chinese governmental authorities. This could affect our ability
to obtain foreign exchange through debt or equity financing, including by means
of loans or capital contributions from us, which could materially adversely
affect our business and financial results.

Fluctuations in exchange rates could result in foreign
currency exchange losses.

Because our earnings and cash and cash equivalent assets are
denominated in Renminbi and the net proceeds from our private placements have
been and most likely will be denominated in U.S. dollars, fluctuations in
exchange rates between U.S. dollars and Renminbi will affect the relative
purchasing power of the proceeds from the private placements and our balance
sheet and earnings per share in U.S. dollars. In addition, appreciation or
depreciation in the value of the Renminbi relative to the U.S. dollar would
affect our financial results reported in U.S. dollar terms without giving effect
to any underlying change in our business or results of operations. For example,
due to the recent devaluation of the U.S. dollar against

17

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the euro and several other currencies, the Chinese government
has indicated that it may be re-evaluating its decade-old policy of pegging the
value of the Renminbi to the U.S. dollar. Fluctuations in the exchange rate will
also affect the relative value of any dividend we may issue which will be
exchanged into U.S. dollars as well as the earnings from and the value of any
U.S. dollar-denominated investments we make in the future.

Very limited hedging transactions are available in China to
reduce our exposure to exchange rate fluctuations. To date, we have not entered
into any hedging transactions in an effort to reduce our exposure to foreign
currency exchange risk. While we may decide to enter into hedging transactions
in the future, the availability and effectiveness of these hedges may be limited
and we may not be able to successfully hedge our exposure at all. In addition,
our currency exchange losses may be magnified by Chinese exchange control
regulations that restrict our ability to convert Renminbi into foreign currency.
As a result, our financial results could be materially adversely affected.

Risks Relating to our Common Stock

We have not paid any dividends and do not foresee paying
dividends in the future.

Payment of dividends on our common stock is within the
discretion of the board of directors and will depend upon our future earnings,
our capital requirements, financial condition and other relevant factors. We
have no plan to declare any dividends in the foreseeable future.

For reasons outside our control, our stock price can be
volatile.

The market price of our common stock can be highly volatile and
fluctuate widely in price in response to various factors, many of which are
beyond our control, including:

- technological innovations or new video solutions and services by us or our
  competitors;
- additions or departures of key personnel;
- sales of our common stock;
- our ability to integrate operations, technology, products and services;
- our ability to execute our business plan;
- operating results below expectations;
- loss of any strategic partner or relationship;
- industry developments;
- economic and other external factors; and
- period-to-period fluctuations in our financial results.

Because we have a limited operating history and have earned
minimal revenues to date, any one of these factors may have a material adverse
effect on our business, results of operations and financial condition. Our stock
price may fluctuate widely as a result of any of the above listed factors.

In addition, the securities markets have from time to time
experienced significant price and volume fluctuations that are unrelated to the
operating performance of particular companies. These market fluctuations may
also materially and adversely affect the market price of our common stock.

Our common stock is subject to the Penny Stock rules of
the SEC, which make transactions in our common stock cumbersome and may reduce
the value of an investment in our common stock.

Our common stock is quoted on the National Association of
Securities Dealers Inc.s OTC Bulletin Board, which is generally considered to
be a less efficient market than markets such as NASDAQ or other national
exchanges, and which may cause difficulty in conducting trades and obtaining
future financing. Further, our securities are subject to the penny stock rules
adopted pursuant to Section 15(g) of the Exchange Act. The penny stock rules
apply generally to companies whose common stock trades at less than $5.00 per
share, subject to certain limited exemptions. Such rules require, among other
things, that brokers who trade

18

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penny stock to persons other than established customers
complete certain documentation, make suitability inquiries of investors and
provide investors with certain information concerning trading in the security,
including a risk disclosure document and quote information under certain
circumstances. Many brokers have decided not to trade penny stock because of
the requirements of the penny stock rules and, as a result, the number of
broker-dealers willing to act as market makers in such securities is limited. In
the event that we remain subject to the penny stock rules for any significant
period, there may develop an adverse impact on the market, if any, for our
securities. Because our securities are subject to the penny stock rules,
investors will find it more difficult to dispose of our securities. Further, it
is more difficult: (i) to obtain accurate quotations, (ii) to obtain coverage
for significant news events because major wire services, such as the Dow Jones
News Service, generally do not publish press releases about such companies, and
(iii) to obtain needed capital.

Please read this annual report carefully. You should rely only
on the information contained in this annual report. We have not authorized
anyone to provide you with different information. You should not assume that the
information provided in this annual report is accurate as of any date other than
the date on the front of this annual report.

|ITEM 2. | DESCRIPTION OF PROPERTY
|------- | -----------------------

Commencing March 2008, our principal executive offices have
been re-located to leased premises at Sunny Palace, Suite B2-1202, Xibahe Road,
Chaoyang District, Beijing 100028, PRC. Relocation of the principal office to
Beijing allows us to focus on the implementation and roll-out of the IPTV
platform in China.

|ITEM 3. | LEGAL PROCEEDINGS
|------- | -----------------

We currently are not a party to any material legal proceedings
and, to our knowledge, no such proceedings are threatened or contemplated.

|ITEM 4. | SUBMISSION OF MATTERS TO A VOTE OF
      SECURITIES HOLDERS
|------- | -----------------------------------------------------------

No matters were submitted to our security holders for a vote
during our last fiscal quarter.

PART II

|ITEM 5. | MARKET FOR COMMON
      EQUITY AND RELATED STOCKHOLDER MATTERS
|------- | --------------------------------------------------------------

Market Information

Shares of our common stock are quoted on the OTC Bulletin Board
under the symbol ITNS. Our common stock became eligible for trading on the OTC
Bulletin Board on February 20, 2007.

The following table indicates the high and low bid prices of
our common stock during the periods indicated, in US dollars:

Quarter Ended
    High Bid
    Low BidFebruary 29, 2008
    $0.24
    $0.027November 30, 2007
    $0.24
    $0.26August 31, 2007
    $1.27
    $0.55May 31, 2007
    $1.25
    $0.15February 28, 2007
    $0.17
    $0.051


19

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The last reported sales price of our common stock on the OTC
Bulletin Board on March 28, 2008 was $0.024 per share.

The source of the high and low bid information is the NASD OTC
Bulletin Board. The market quotations provided reflect inter-dealer prices,
without retail mark-up, markdown or commission and may not represent actual
transactions.

Holders of Our Common Stock

As at March 28, 2008, we had approximately 660 registered
holders of our common stock.

Dividends

There are no restrictions in our articles of incorporation or
by-laws that prevent us from declaring dividends. The declaration of dividends
is at the discretion of our board. The Nevada Revised Statutes, however, do
prohibit us from declaring dividends where, after giving effect to the
distribution of the dividend:

- we would not be able to pay our debts as they become due in the usual
  course of business; or
- our total assets would be less than the sum of our total liabilities plus
  the amount that would be needed to satisfy the rights of stockholders who have
  preferential rights superior to those receiving the distribution.

We have not declared any dividends and we do not plan to
declare any dividends in the foreseeable future.

Securities Authorized For Issuance Under Compensation
Plans

Our board of directors has approved the Companys 2006 Stock
Option Plan as of June 16, 2006. The table set forth below presents information
relating to our equity compensation plans as of the date of this annual
report:

|                                                                                    |                         |                      | Number of Securities   
|----------------------------------------------------------------------------------- | ----------------------- | -------------------- | -----------------------
|                                                                                    | Number of Securities to | Weighted-Average     | Remaining Available for
|                                                                                    | be Issued Upon Exercise | Exercise Price of    | Future Issuance Under  
|                                                                                    | of Outstanding Options, | Outstanding Options, | Equity Compensation    
|                                                                                    | Warrants and Rights     | Warrants and Rights  | Plans (excluding column
|Plan
      Category                                                                 | (a)                     | (b)                  | (a))                   
|                                                                                    |                         |                      |                        
|Equity Compensation Plans Approved
      bySecurity Holders (2006Stock Option Plan) | 3,000,000(1)            | $0.267               | Nil                    
|Equity Compensation Plans Not Approved by Security
      Holders                    | N/A                     | N/A                  | N/A                    

| | (1) | Represents shares of our common stock to be issued upon
      the exercise of option issued pursuant to the Companys 2006 Stock Option
      Plan.
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------

Recent Sales of Unregistered Securities

On December 20, 2006, the Company issued 155,364 shares of its
common stock to a private investor at a price of $0.083 per share, for total
cash proceeds of $12,947. These shares were issued in reliance on Rule 903 of
Regulation S under the Securities Act of 1934, as amended (the
Securities Act).

On February 1, 2007, the Company issued 600,000 shares of its
common stock to Westport Strategic Partners Inc. pursuant to a consulting
agreement under which Westport Strategic Partners Inc. provides

20

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investor and public relations services to the Company. These
shares were issued to Westport Strategic Partners Inc. based upon their
representations as accredited investors (as defined in Rule 501 under Regulation
D under the Securities Act) in reliance on Rule 506 under the Securities
Act.

On February 10, 2007, the Company issued 1,200,000 shares of
its common stock to a private investor at a price of $0.083 per share, for total
cash proceeds of $100,000. These shares were issued in reliance on Rule 903 of
Regulation S under the Securities Act.

On March 31, 2007, the Company issued 1,200,000 shares of its
common stock to a private investor at a price of $0.083 per share, for total
cash proceeds of $100,000. These shares were issued in reliance on Rule 903 of
Regulation S under the Securities Act.

On April 11, 2007, the Company issued 438,208 shares of its
common stock to a private investor at a price of $0.075 per share, for total
cash proceeds of $32,866. These shares were issued in reliance on Rule 903 of
Regulation S under the Securities Act.

On May 18, 2007, the Company issued 936,300 shares of its
common stock to a private investor at a price of $0.050 per share, for total
cash proceeds of $46,815. These shares were issued in reliance on Rule 903 of
Regulation S under the Securities Act.

On June 11, 2007, the Company issued 1,000,000 units to a
private investor at a price of $0.25 per unit, for total cash proceeds of
$250,000. Each unit was comprised of one share of the Companys common stock and
one common stock purchase warrant. Each common stock purchase warrant entitles
the holder to purchase one share of our common stock at price of $0.25 per share
until June 11, 2009. These units were issued in reliance on Rule 903 of
Regulation S under the Securities Act.

|ITEM 6. | MANAGEMENT DISCUSSION AND ANALYSIS OR PLAN
      OF OPERATIONS
|------- | --------------------------------------------------------------

The following discussion should be read in conjunction with (i)
our audited consolidated financial statements as at and for the years ended
November 30, 2007 and the related notes; and (ii) the section of this prospectus
entitled Description of Business, that appears elsewhere in this annual
report. The following discussion contains forward-looking statements that
reflect our plans, estimates and beliefs. Our actual results could differ
materially from those discussed in the forward looking statements. Factors that
could cause or contribute to such differences include, but are not limited to,
those discussed below and elsewhere in this prospectus, particularly in the
section entitled Risk Factors. Our financial statements are stated in United
States dollars and are prepared in accordance with United States Generally
Accepted Accounting Principles.

Overview

We were in the business of commercializing our ITonis Video
Solution which enabled the on-demand delivery of video content, including
television channels and videos, to consumers via broadband Internet for viewing
on their television sets. However, due to the minimal level of acceptance of our
ITonis Video Solution by the market, on December 31, 2007, we placed ITonis CZ
(which held the ITonis Video Solution assets) into liquidation.

Since August 2007, we had been in negotiations with the second
largest television broadcaster, Shandong Television (SDTV), in the Peoples
Republic of China to develop a national IPTV platform for China. On December 14,
2007, we entered into a joint cooperation agreement with Pilot Media to
establish an online IPTV platform in China. See Description of Business 
Recent Developments for more information on the joint cooperation
agreement.

In order to comply with Chinese laws in connection with the
joint cooperation agreement, we have entered into the Beijing Share Purchase
Agreement to acquire a Chinese subsidiary (BJTCD) to operate in China. We
expect to complete this acquisition on or about June 1, 2008. In addition, our
wholly owned subsidiary,

21

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Aquos, is involved in the establishment of an IPTV platform in
China. BTJCD will be 100% owned by a Hong Kong company to be established by us,
which in turn will be 100% owned by Aquos, wish is 100% owned by us. These
companies, and their places of organization, are necessary for us to effectively
transfer our earnings from the Chinese business to our bank accounts in the
United States.

China is widely regarded as the worlds fastest growing IPTV
market and offers a unique business growth opportunity for us. Development of
relevant technology solutions and build-out of the IPTV platform in conjunction
with SDTV now forms a major component of our business strategy.

SDTV is currently in the process of obtaining all necessary
governmental approvals for a national roll-out during 2008 of the China IPTV
platform in conjunction with us. The business venture will be an internet-based
television portal that we expect will eventually deliver over 150 foreign and
domestic channels to all of China. Licensed by the State Administration for Film
and Television, broadcasting is scheduled to commence in June 2008.

Results of Operations

|                                 |   |              |   |   |              |   |   | From          |  
|-------------------------------- | - | ------------ | - | - | ------------ | - | - | ------------- | -
|                                 |   |              |   |   |              |   |   | Incorporation |  
|                                 |   | For the      |   |   | For the      |   |   | July 5,       |  
|                                 |   | Year Ended   |   |   | Year Ended   |   |   | 2005 to       |  
|                                 |   | November 30, |   |   | November 30, |   |   | November 30,  |  
|                                 |   | 2007         |   |   | 2006         |   |   | 2007          |  
|Sales                            | $ | 206,828      |   | $ | 24,351       |   | $ | 231,179       |  
|Cost of Sales                    |   | 173,432      |   |   | 9,424        |   |   | 182,856       |  
|                                 |   | 33,396       |   |   | 14,927       |   |   | 48,323        |  
|General and Administrative       |   |              |   |   |              |   |   |               |  
|Expenses                         |   |              |   |   |              |   |   |               |  
|Software development costs       |   | 364,177      |   |   | 321,433      |   |   | 726,731       |  
|Consulting                       |   | 285,543      |   |   | 35,336       |   |   | 320,879       |  
|Salaries and wages               |   | 226,852      |   |   | 66,581       |   |   | 302,447       |  
|Office                           |   | 152,550      |   |   | 54,324       |   |   | 207,497       |  
|Auditing and accounting          |   | 137,092      |   |   | 91,493       |   |   | 284,035       |  
|Legal                            |   | 52,041       |   |   | 59,476       |   |   | 123,309       |  
|Rent                             |   | 42,619       |   |   | 32,019       |   |   | 74,638        |  
|Stock-based
      compensation   |   | 32,950       |   |   | 9,014        |   |   | 41,964        |  
|Depreciation                     |   | 32,281       |   |   | 19,849       |   |   | 52,971        |  
|Filing fees                      |   | 19,842       |   |   | 7,287        |   |   | 27,129        |  
|Investor relations               |   | 6,235        |   |   | 18,680       |   |   | 24,915        |  
|Foreign exchange
      loss      |   | 3,306        |   |   | 5,850        |   |   | 9,156         |  
|Intellectual property            |   | -            |   |   | 1,500,000    |   |   | 1,947,637     |  
|Marketing and
      distribution |   | -            |   |   | 120,000      |   |   | 120,000       |  
|Bad debts                        |   | -            |   |   | 9,789        |   |   | 9,789         |  
|                                 |   | 1,355,488    |   |   | 2,351,131    |   |   | 4,273,097     |  
|Loss from Operations             |   | (1,322,092   | ) |   | (2,336,204   | ) |   | (4,224,774    | )
|                                 |   |              |   |   |              |   |   |               |  
|Write down of assets             |   | (76,234      | ) |   | -            |   |   | (76,234       | )
|Other income                     |   | -            |   |   | 33,926       |   |   | 33,926        |  
|Loss for the
      Year          | $ | (1,398,326   | ) | $ | (2,302,278   | ) | $ | (4,267,082    | )
|                                 |   |              |   |   |              |   |   |               |  
|Loss per Share  Basic and       |   |              |   |   |              |   |   |               |  
|Diluted                          | $ | (0.02        | ) | $ | (0.04        | ) |   |               |  

22

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|Weighted Average Shares      |   |            |   |   |            |   |   |            |  
|---------------------------- | - | ---------- | - | - | ---------- | - | - | ---------- | -
|Outstanding                  |   | 71,714,329 |   |   | 63,271,418 |   |   |            |  
|                             |   |            |   |   |            |   |   |            |  
|                             |   |            |   |   |            |   |   |            |  
|Comprehensive Loss           |   |            |   |   |            |   |   |            |  
|Loss for the year            | $ | (1,398,326 | ) | $ | (2,302,278 | ) | $ | (4,267,082 | )
|Foreign currency translation |   |            |   |   |            |   |   |            |  
|adjustment                   |   | (96,029    | ) |   | (9,420     | ) |   | (105,449   | )
|Total Comprehensive Loss for |   |            |   |   |            |   |   |            |  
|the Year                     | $ | (1,494,355 | ) | $ | (2,311,698 | ) | $ | (4,372,531 | )
|                             |   |            |   |   |            |   |   |            |  
|                             |   |            |   |   |            |   |   |            |  
|Comprehensive Loss per Share | $ | (0.02      | ) | $ | (0.04      | ) |   |            |  

Revenue

We generated minimal revenues during fiscal 2007 through the
delivery of our encoding platform to customers for encoding content from DVD
disks onto the customers video demand platform. We have abandoned this
technology in favor of our ITonis Video Solution technology. For more
information, see Description of Business  Recent Developments.

These revenues are not significant in relation to our overall
expenses. We anticipate that we will not earn any significant revenues until
such time as we have achieved commercial deployment of our IPTV platform.

We are presently not earning any revenues from our business
activities.

Marketing And Distribution

The Company did not incur any significant marketing and
distribution expenses during fiscal 2007, although such expenses are expected to
increase substantially as the IPTV network is rolled out in 2008.

Audit and Accounting

Our accounting and auditing expenses include professional fees
for accounting and auditing expenses incurred in connection with the preparation
and audit of our financial statements.

We will continue to incur auditing and accounting expenses on
an ongoing basis in connection with our continuous disclosure obligations as a
reporting company under the United States Securities Exchange Act of 1934.

Salaries And Wages

Currently, our only employees are our three executive officers.
We expect to employ approximately 100 people in the China business during the
first several months of operation of our IPTV platform and expect these expenses
to increase significantly.

Legal

Our legal expenses include professional fees that we pay to our
legal counsel.

We will continue to incur legal expenses on an ongoing basis in
connection with our continuous disclosure obligations as a reporting company
under the United States Securities Exchange Act of 1934.

23

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Office

Our office expenses included the rent paid for our research and
development facility in Prague and general office expenses.

Our office expenses increased significantly in fiscal 2007 as
the result of ITonis CZ entering into a lease for our research and development
facility in Prague. This lease expense was ongoing through fiscal 2007 until
December 31, 2007, when the Prague office was closed as part of our strategy to
focus on the IPTV project in China. Since March 1, 2008, our new offices have
been leased in Beijing, China.

Consulting

Consulting fees represent amounts that we pay to consultants
that are engaged by us and expect these expenses to increase in the future.

We incurred consulting fees during fiscal 2007 as our business
activities increased.

Depreciation

Depreciation expenses represents depreciation of our computer
hardware and equipment.

Other Income

We did not generate any other revenues during fiscal 2007.

Liquidity and Capital Resources

Cash and Working Capital

As at November 30, 2007, we had cash of $4,306 and a working
capital deficit of $1,101,214, compared to cash of $1,751 and a working capital
deficit of $442,867 as at November 30, 2006. We have financed our operations
primarily from the sale of our common stock. However, there can be no assurance
that we will be able to raise funds from the sale of our common stock, or in any
other manner, in the future.

Related Party Loan

During fiscal 2006 Mr. Nicolas Lavaud, our former director and
chief executive officer, granted us a loan which was outstanding in the amount
of $43,815 as of November 30, 2007. The loan is evidenced by a promissory note,
is unsecured and does not bear any interest. The promissory note is payable on
demand.

Plan of Operations

Our plan of operations is to complete our obligations under our
joint cooperation agreement with Pilot Media and to establish the ChinaTV-Net
business with Pilot Media under this arrangement, as described in Item 1 of this
Annual Report  Description of Business.

Under the Joint Cooperation Agreement, we are required, among
other things, to raise funding in the amount of $15,000,000 by June 8, 2008.
Based on this requirement and our other financing needs for the joint venture,
our planned expenditures over the next twelve months are approximately
$25,000,000. We anticipate that we will require financing in the amount of
approximately $25,000,000 in order to carry out our plan of operations for the
next twelve months. We anticipate that we currently do not have sufficient funds
to enable us to undertake our plan of operations past the next two months.
Accordingly, we anticipate that we will require additional financing in order to
enable us to sustain our operations for the next twelve months.

24

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We anticipate that additional funding will be in the form of
equity financing from the sale of our common stock. We presently have no
arrangements in place for any additional equity financings. In the absence of
such additional financing, we may not be able to continue our plan of operations
beyond the next month and our business plan may fail. If we do not obtain the
required additional financing, we will initially scale back our business
operations and may ultimately be forced to abandon our plan of operations and
our business activities.

Cash Used In Operating Activities

We used cash of $534,362 in operating activities during fiscal
2007 compared to cash used of $399,934 in operating activities during fiscal
2006.

Cash From/Used in Investing Activities

We used cash of $42,002 in investing activities during fiscal
2007 which consisted of upgrades and enhancements to technology and purchases of
equipment. We used cash in investing activities in the amount of $33,119 during
fiscal 2006. Cash used in investing activities in fiscal 2007 was attributable
primarily to the purchase of computer hardware and equipment that we have
acquired in connection with the development and testing of our ITonis video
solution.

Cash from Financing Activities

We generated cash of $725,128 from financing activities during
fiscal 2007 compared to cash of $284,641 generated from financing activities
during fiscal 2006. Cash generated from financing activities during fiscal 2007
and 2006 was attributable to shares issued for cash.

Going Concern

We have not attained profitable operations and are dependent
upon obtaining financing to pursue any extensive business activities. For these
reasons our auditors stated in their report that they have substantial doubt we
will be able to continue as a going concern.

Future Financings

We anticipate continuing to rely on equity sales of our common
shares in order to continue to fund our business operations. Issuances of
additional shares will result in dilution to our existing stockholders. There is
no assurance that we will achieve any additional sales of our equity securities
or arrange for debt or other financing to fund our planned activities.

Off-Balance Sheet Arrangements

We have no significant off-balance sheet arrangements that have
or are reasonably likely to have a current or future effect on our financial
condition, changes in financial condition, revenues or expenses, results of
operations, liquidity, capital expenditures or capital resources that are
material to stockholders.

Critical Accounting Policies

Development Stage Company

We are a development stage company as defined by Financial
Accounting Standards No. 7. We are presently devoting all of our present efforts
to establishing a new business. All losses accumulated since inception have been
considered as part of our development stage activities.

25

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Revenue Recognition

We recognize revenue when all of the following criteria have
been met: persuasive evidence for an arrangement exists; delivery has occurred;
the fee is fixed or determinable; and collection is reasonably assured. Upfront
contract payments received from the sale of services not yet earned are
initially recorded as deferred revenue on the balance sheet.

Revenue from time and material service contracts is recognized
as the services are provided. Revenue from fixed price, long-term service or
development contracts is recognized over the contract term based on the
percentage of services that are provided during the period compared with the
total estimated services to be provided over the entire contract. Losses on
fixed price contracts are recognized during the period in which the loss first
becomes apparent. Payment terms vary by contract.

Foreign Currency Translations

For the year ended November 30, 2007, our functional currency
was the Czech Koruna (CZK), while our reporting currency is the U.S. dollar.
All transactions initiated in other currencies are re-measured into the
functional currency as follows:

| | (a) | Monetary assets and liabilities at the rate of exchange
      in effect at the balance sheet date;
| | --- | --------------------------------------------------------------------------------------------------
| |     |                                                                                                   
| | (b) | Non-monetary assets and liabilities, and equity at
      historical rates; and                    
| |     |                                                                                                   
| | (c) | Revenue and expense items at the average rate of exchange
      prevailing during the year.       

Gains and losses on re-measurement are included in determining
net income for the year.

Translation of balances from the functional currency into the
reporting currency is conducted as follows:

| | (a) | Assets and liabilities at the rate of exchange in effect
      at the balance sheet date;  
| | --- | -------------------------------------------------------------------------------------------
| |     |                                                                                            
| | (b) | Equity at historical rates; and                                                            
| |     |                                                                                            
| | (c) | Revenue and expense items at the average rate of exchange
      prevailing during the year.

Translation adjustments resulting from translation of balances
from functional to reporting currency are accumulated as a separate component of
shareholders equity as a component of comprehensive income or loss. Upon sale
or liquidation of the net investment in the foreign entity the amount deferred
will be recognized in income.

Use of Estimates

The preparation of financial statements in conformity with
accounting principles generally accepted in the United States of America
requires management to make certain estimates and assumptions that affect the
reported amounts and timing of revenues and expenses, the reported amounts and
classification of assets and liabilities, and disclosure of contingent assets
and liabilities. These estimates and assumptions are based on the Company's
historical results as well as management's future expectations. The Company's
actual results could vary materially from management's estimates and
assumptions.

Software Costs

The Companys policy is that software development costs related
to the product line are charged to expense as incurred in accordance with SFAS
No. 86, "Accounting for the Costs of Computer Software to Be Sold, Leased, or
Otherwise Marketed." This Statement specifies that costs incurred internally in
creating a computer software product shall be charged to expense when incurred
as research and development until

26

---

technological feasibility has been established for the product.
Technological feasibility is established upon completion of a detail program
design or, in its absence, completion of a working model. Technological
feasibility has not been established at November 30, 2007.

Costs for internal use software, whether developed or obtained,
are assessed to determine whether they should be capitalized or expensed in
accordance with American Institute of Certified Public Accountants' Statement
("SOP") 98-1, "Accounting for the Costs of Computer Software Developed or
Obtained for Internal Use." Capitalized software costs, if any, will be
reflected as rights and technology on the balance sheet. During the periods, the
Company expensed all software development costs.

Segment Reporting

SFAS No. 131, "Disclosures about Segments of an Enterprise and
Related Information, requires entity-wide disclosures about the products and
services an entity provides, the material countries in which it holds assets and
reports revenues and its major customers. The Company currently operates in two
segments, Czech Republic and United States.

Website Development Costs

The Company has adopted Emerging Issues Task Force Issue
(EITF) 00-2 Accounting for Web Site Development Costs, which reached a
consensus that, regardless of whether the website planning activities
specifically relate to software, all costs incurred in the planning stage should
be expensed as incurred. However, costs incurred in the operation stage that
involve providing additional functions or features to the website should be
accounted for as, in effect, new software. That is, costs of upgrades and
enhancements that add functionality should be expensed or capitalized based on
the general model of SOP 98-1 and FASB Statement 86.

Stock- Based Compensation

Effective March 1, 2006, the Company adopted the provisions of
Statement of Financial Accounting Standards (SFAS) No. 123(R), Share-Based
Payment (SFAS 123(R)), which establishes accounting for equity instruments
exchanged for employee services. Under the provisions of SFAS 123(R),
stock-based compensation cost is measured at the grant date, based on the
calculated fair value of the award, and is recognized as an expense over the
employees requisite service period (generally the vesting period of the equity
grant). Before March 1, 2006, the Company accounted for stock-based compensation
to employees in accordance with Accounting Principles Board Opinion No. 25,
Accounting for Stock Issued to Employees, and complied with the disclosure
requirements of SFAS No. 123, Accounting for Stock-Based Compensation (SFAS
123). The Company adopted SFAS 123(R) using the modified prospective method,
which required the Company to record compensation expense over the vesting
period for all awards granted after the date of adoption, and for the unvested
portion of previously granted awards that remain outstanding at the date of
adoption. Accordingly, financial statements for the periods prior to March 1,
2006 have not been restated to reflect the fair value method of expensing
share-based compensation. Adoption of SFAS 123(R) does not change the way the
Company accounts for share-based payments to non-employees, with guidance
provided by SFAS 123 (as originally issued) and ETIF Issue No. 96-18,
Accounting for Equity Instruments That Are Issued to Other Than Employees for
Acquiring, or in Conjunction with Selling, Goods or Services.

|ITEM 7. | FINANCIAL STATEMENTS
|------- | --------------------

We have filed as part of this annual report our audited
financial statements as of and for the year ended November 30, 2007 and the
related notes to these financial statements. These financial statements are set
forth in this annual report below, and are incorporated by reference in this
Item 7.

27

---



ITONIS INC.

(Formerly Kenshou Inc.)

(A Development Stage Company)

CONSOLIDATED FINANCIAL STATEMENTS

November 30, 2007 and 2006

US FUNDS



F-1

---

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and 
  Stockholders of Itonis Inc. 
  (A Development Stage Company)

We have audited the accompanying consolidated balance sheets
  of Itonis Inc. (the Company) (formerly Kenshou Inc.) (a development
  stage company) as of November 30, 2007 and 2006, and the related consolidated
  statements of operations, shareholders equity (deficiency) and cash flows
  for the years then ended and for the period July 5, 2005 (date of inception)
  to November 30, 2007. 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, referred to above, in accordance with
  the standards of the Public Company Accounting Oversight Board (United States).
  Those standards require that we plan and perform the audits 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 included consideration
  of internal control over financial reporting as a basis for designing audit
  procedures that are appropriate in the circumstances, but not for the purpose
  of expressing an opinion on the effectiveness of the companys internal
  control over financial reporting. Accordingly, we express no such opinion. An
  audit also includes examining, on a test basis, evidence supporting the amounts
  and disclosures in the financial statements, assessing the accounting principles
  used and significant estimates made by management, as well as evaluating the
  overall financial statement presentation. We believe that our audits provide
  a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred
  to above present fairly, in all material respects, the financial position of
  the Company. as of November 30, 2007 and 2006, and the results of its operations
  and its cash flows for the years then ended and for the period July 5, 2005
  (date of inception) to November 30, 2007 in conformity with accounting principles
  generally accepted in the United States of America.

The accompanying consolidated financial statement have been prepared
  assuming that the Company will continue as a going concern. As more fully described
  in Note 1 to the consolidated financial statements, the Company has a working
  capital deficiency, an accumulated deficit and operating cash flow deficit and
  that 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
  1. These financial statements do not include any adjustments that might result
  from the outcome of this uncertainty.

*/s/ Danziger Hochman Partners LLP*

Danziger Hochman Partners LLP 
  Toronto, Canada 
  March 19, 2008

F-2

---

|ITonis Inc.                   | Statement 1
|----------------------------- | -----------
|(Formerly Kenshou Inc.)       |            
|(A Development Stage Company) |            
|Consolidated Balance Sheets   |            
|US Funds                      |            

|                                                  |   | As at        |   |   | As at        |  
|------------------------------------------------- | - | ------------ | - | - | ------------ | -
|                                                  |   | November 30, |   |   | November 30, |  
|ASSETS                                            |   | 2007         |   |   | 2006         |  
|Current                                           |   |              |   |   |              |  
|Cash                                              | $ | 4,306        |   | $ | 1,571        |  
|Accounts receivable                               |   | -            |   |   | 4,934        |  
|Prepaid expenses                                  |   | 654          |   |   | 25,590       |  
|                                                  |   | 4,960        |   |   | 32,095       |  
|                                                  |   |              |   |   |              |  
|Equipment                                         |   | 19,929       |   |   | 47,859       |  
|                                                  | $ | 24,889       |   | $ | 79,954       |  
|                                                  |   |              |   |   |              |  
|                                                  |   |              |   |   |              |  
|LIABILITIES                                       |   |              |   |   |              |  
|Current                                           |   |              |   |   |              |  
|Accounts payable                                  | $ | 793,052      |   | $ | 228,463      |  
|Accrued liabilities                               |   | 103,927      |   |   | 62,668       |  
|Due to related parties                            |   | 209,195      |   |   | 183,831      |  
|                                                  |   | 1,106,174    |   |   | 474,962      |  
|                                                  |   |              |   |   |              |  
|                                                  |   |              |   |   |              |  
|Going Concern(Note 1)                             |   |              |   |   |              |  
|                                                  |   |              |   |   |              |  
|                                                  |   |              |   |   |              |  
|STOCKHOLDERS DEFICIENCY                          |   |              |   |   |              |  
|Capital Stock                                     |   |              |   |   |              |  
|Preferred stock                                   |   |              |   |   |              |  
|Authorized:                                       |   |              |   |   |              |  
|5,000,000 preferred shares with $0.001 par value  |   |              |   |   |              |  
|Issued and fully paid: Nil                        |   | -            |   |   | -            |  
|Common stock                                      |   |              |   |   |              |  
|Authorized:                                       |   |              |   |   |              |  
|300,000,000 common shares with $0.001 par value   |   |              |   |   |              |  
|Issued, allotted and fully
      paid:            |   |              |   |   |              |  
|73,111,853 common shares (68,781,981             |   |              |   |   |              |  
|November
      30, 2006)                          |   | 73,112       |   |   | 68,782       |  
|Share subscriptions
      received                |   | 282,500      |   |   | -            |  
|Additional paid-in capital                        |   | 2,935,634    |   |   | 2,414,386    |  
|Accumulated Comprehensive Loss                    |   | (105,449     | ) |   | (9,420       | )
|Deficit Accumulated during the development stage |   | (4,267,082   | ) |   | (2,868,756   | )
|                                                  |   | (1,081,285   | ) |   | (395,008     | )
|                                                  | $ | 24,889       |   | $ | 79,954       |  

- See Accompanying Notes -

F-3

---

|ITonis Inc.                                                            | Statement 2
|---------------------------------------------------------------------- | -----------
|(Formerly Kenshou Inc.)                                                |            
|(A Development Stage Company)                                          |            
|Consolidated Statements of **Stockholders
      Equity (Deficiency)** |            
|US Funds                                                               |            

DeficitAccumulatedAdditional
      
      
      Share
      
      
      Accumulated
      
      
      During the
      
      
      TotalCommon
        Stock
      
      
      Paid-in
      
      
      Subscriptions
      
      
      Comprehensive
      
      
      Development
      
      
      StockholdersShares
      
      
      Amount
      
      
      Capital
      
      
      Received
      
      
      Loss
      
      
      Stage
      
      
      DeficiencyFounder shares issued forcash at $0.001 per shareon July 8, 2005
      
      750,000
      
      $
      750
      
      $
      (250
      )
      $
      -
      
      $
      -
      
      $
      -
      
      $
      500Shares issued for cash at$0.007 per share onSeptember 14, 2005
      
      12,000,000
      
      
      12,000
      
      
      68,000
      
      
      -
      
      
      -
      
      
      -
      
      
      80,000Shares issued for cash at$0.033 per share onNovember 16, 2005
      
      4,466,289
      
      
      4,466
      
      
      144,410
      
      
      -
      
      
      -
      
      
      -
      
      
      148,876Shares issued foracquisition of software
        at$0.015 per share onNovember 16, 2005
      
      30,000,000
      
      
      30,000
      
      
      417,637
      
      
      -
      
      
      -
      
      
      -
      
      
      447,637Loss for the period
      
      -
      
      
      -
      
      
      -
      
      
      -
      
      
      -
      
      
      (566,478
      )
      
      (566,478
      )Balance - November 30,2005
      
      47,216,289
      
      
      47,216
      
      
      629,797
      
      
      -
      
      
      -
      
      
      (566,478
      )
      
      110,535Shares issued for acquisitionof intellectual property at$0.083 per share onFebruary 7, 2006
      
      18,000,000
      
      
      18,000
      
      
      1,482,000
      
      
      -
      
      
      -
      
      
      -
      
      
      1,500,000Shares issued for cash at$0.083 per share on April10, 2006
      
      2,215,692
      
      
      2,216
      
      
      182,425
      
      
      -
      
      
      -
      
      
      -
      
      
      184,641Share issued for consultingservices at $0.083 pershare
      
      150,000
      
      
      150
      
      
      12,350
      
      
      -
      
      
      -
      
      
      -
      
      
      12,500Shares issued for cash at$0.083 per share
      
      1,200,000
      
      
      1,200
      
      
      98,800
      
      
      -
      
      
      -
      
      
      -
      
      
      100,000Stock-based compensation
      
      -
      
      
      -
      
      
      9,014
      
      
      -
      
      
      -
      
      
      -
      
      
      9,014Loss for the period
      
      -
      
      
      -
      
      
      -
      
      
      -
      
      
      -
      
      
      (2,302,278
      )
      
      (2,302,278
      )Foreign currency translationadjustment
      
      -
      
      
      -
      
      
      -
      
      
      -
      
      
      (9,420
      )
      
      -
      
      
      (9,420
      )Balance  November 30,2006
      
      68,781,981
      
      
      68,782
      
      
      2,414,386
      
      
      -
      
      
      (9,420
      )
      
      (2,868,756
      )
      
      (395,008
      )Shares issued for cash at$0.083 per share
      
      1,355,364
      
      
      1,355
      
      
      111,592
      
      
      -
      
      
      -
      
      
      -
      
      
      112,947Shares issued forconsulting services at$0.083 per share
      
      600,000
      
      
      600
      
      
      49,400
      
      
      -
      
      
      -
      
      
      -
      
      
      50,000Shares issued for cash at$0.075 per share
      
      438,208
      
      
      438
      
      
      32,428
      
      
      -
      
      
      -
      
      
      -
      
      
      32,866Shares issued for cash at$0.05 per share
      
      936,300
      
      
      937
      
      
      45,878
      
      
      -
      
      
      -
      
      
      -
      
      
      46,815Shares issued for cash at$0.25 per share
      
      1,000,000
      
      
      1,000
      
      
      249,000
      
      
      -
      
      
      -
      
      
      -
      
      
      250,000Share subscriptionsreceived
      
      -
      
      
      -
      
      
      -
      
      
      282,500
      
      
      -
      
      
      -
      
      
      282,500Stock-based compensation
      
      -
      
      
      -
      
      
      32,950
      
      
      -
      
      
      -
      
      
      -
      
      
      32,950Loss for the period
      
      -
      
      
      -
      
      
      -
      
      
      -
      
      
      -
      
      
      (1,398,326
      )
      
      (1,398,326
      )Foreign currency translationadjustment
      
      -
      
      
      -
      
      
      -
      
      
      -
      
      
      (96,029
      )
      
      -
      
      
      (96,029
      )Balance  November 30,2007
      
      73,111,853
      
      $
      73,112
      
      $
      2,935,634
      
      $
      282,500
      
      $
      (105,449
      )
      $
      (4,267,082
      )
      $
      (1,081,285
      )


- See Accompanying Notes -

F-4

---

|ITonis Inc.                           | Statement 3
|------------------------------------- | -----------
|(Formerly Kenshou Inc.)               |            
|(A Development Stage Company)         |            
|Consolidated Statements of Operations |            
|US Funds                              |            

|                             |   |              |   |   |              |   |   | From          |  
|---------------------------- | - | ------------ | - | - | ------------ | - | - | ------------- | -
|                             |   |              |   |   |              |   |   | Incorporation |  
|                             |   | For the      |   |   | For the      |   |   | July 5,       |  
|                             |   | Year Ended   |   |   | Year Ended   |   |   | 2005 to       |  
|                             |   | November 30, |   |   | November 30, |   |   | November 30,  |  
|                             |   | 2007         |   |   | 2006         |   |   | 2007          |  
|Sales                        | $ | 206,828      |   | $ | 24,351       |   | $ | 231,179       |  
|Cost of Sales                |   | 173,432      |   |   | 9,424        |   |   | 182,856       |  
|                             |   | 33,396       |   |   | 14,927       |   |   | 48,323        |  
|General and Administrative   |   |              |   |   |              |   |   |               |  
|Expenses                     |   |              |   |   |              |   |   |               |  
|Software development costs   |   | 364,177      |   |   | 321,433      |   |   | 726,731       |  
|Consulting                   |   | 285,543      |   |   | 35,336       |   |   | 320,879       |  
|Salaries and wages           |   | 226,852      |   |   | 66,581       |   |   | 302,447       |  
|Office                       |   | 152,550      |   |   | 54,324       |   |   | 207,497       |  
|Auditing and accounting      |   | 137,092      |   |   | 91,493       |   |   | 284,035       |  
|Legal                        |   | 52,041       |   |   | 59,476       |   |   | 123,309       |  
|Rent                         |   | 42,619       |   |   | 32,019       |   |   | 74,638        |  
|Stock-based compensation     |   | 32,950       |   |   | 9,014        |   |   | 41,964        |  
|Depreciation                 |   | 32,281       |   |   | 19,849       |   |   | 52,971        |  
|Filing fees                  |   | 19,842       |   |   | 7,287        |   |   | 27,129        |  
|Investor relations           |   | 6,235        |   |   | 18,680       |   |   | 24,915        |  
|Foreign exchange loss        |   | 3,306        |   |   | 5,850        |   |   | 9,156         |  
|Intellectual property        |   | -            |   |   | 1,500,000    |   |   | 1,947,637     |  
|Marketing and distribution   |   | -            |   |   | 120,000      |   |   | 120,000       |  
|Bad debts                    |   | -            |   |   | 9,789        |   |   | 9,789         |  
|                             |   | 1,355,488    |   |   | 2,351,131    |   |   | 4,273,097     |  
|Loss from Operations         |   | (1,322,092   | ) |   | (2,336,204   | ) |   | (4,224,774    | )
|                             |   |              |   |   |              |   |   |               |  
|Write down of assets         |   | (76,234      | ) |   | -            |   |   | (76,234       | )
|Other income                 |   | -            |   |   | 33,926       |   |   | 33,926        |  
|Loss for the Year            | $ | (1,398,326   | ) | $ | (2,302,278   | ) | $ | (4,267,082    | )
|                             |   |              |   |   |              |   |   |               |  
|Loss per Share  Basic and   |   |              |   |   |              |   |   |               |  
|Diluted                      | $ | (0.02        | ) | $ | (0.04        | ) |   |               |  
|                             |   |              |   |   |              |   |   |               |  
|Weighted Average Shares      |   |              |   |   |              |   |   |               |  
|Outstanding                  |   | 71,714,329   |   |   | 63,271,418   |   |   |               |  
|                             |   |              |   |   |              |   |   |               |  
|Comprehensive Loss           |   |              |   |   |              |   |   |               |  
|Loss for the year            | $ | (1,398,326   | ) | $ | (2,302,278   | ) | $ | (4,267,082    | )
|Foreign currency translation |   |              |   |   |              |   |   |               |  
|adjustment                   |   | (96,029      | ) |   | (9,420       | ) |   | (105,449      | )
|Total Comprehensive Loss     |   |              |   |   |              |   |   |               |  
|for the Year                 | $ | (1,494,355   | ) | $ | (2,311,698   | ) | $ | (4,372,531    | )
|                             |   |              |   |   |              |   |   |               |  
|Comprehensive Loss per       |   |              |   |   |              |   |   |               |  
|Share                        | $ | (0.02        | ) | $ | (0.04        | ) |   |               |  

- See Accompanying Notes -

F-5

---

|ITonis Inc.                           | Statement 4
|------------------------------------- | -----------
|(Formerly Kenshou Inc.)               |            
|(A Development Stage Company)         |            
|Consolidated Statements of Cash Flows |            
|US Funds                              |            

|                                                |   |              |   |   |              |   |   | From          |  
|----------------------------------------------- | - | ------------ | - | - | ------------ | - | - | ------------- | -
|                                                |   |              |   |   |              |   |   | Incorporation |  
|                                                |   | For the Year |   |   | For the Year |   |   | July 5,       |  
|                                                |   | Ended        |   |   | Ended        |   |   | 2005 to       |  
|                                                |   | November 30, |   |   | November 30, |   |   | November 30,  |  
|                                                |   | 2007         |   |   | 2006         |   |   | 2007          |  
|Operating                                       |   |              |   |   |              |   |   |               |  
|Loss for the year                               | $ | (1,398,326   | ) | $ | (2,302,278   | ) | $ | (4,267,082    | )
|Items not involving an
      outlay of cash:    |   |              |   |   |              |   |   |               |  
|Bad debts                                       |   | -            |   |   | 9,789        |   |   | 9,789         |  
|Depreciation                                    |   | 32,281       |   |   | 19,849       |   |   | 52,971        |  
|Stock-based compensation                        |   | 32,950       |   |   | 9,014        |   |   | 41,964        |  
|Shares issued
      and allotted for services   |   | 50,000       |   |   | 9,651        |   |   | 59,651        |  
|Intellectual property                           |   | -            |   |   | 1,500,000    |   |   | 1,947,637     |  
|Write-down
      of assets                      |   | 76,234       |   |   | -            |   |   | 76,234        |  
|Changes in non-cash working capital items:      |   |              |   |   |              |   |   |               |  
|Accounts
      receivable                       |   | (14,419      | ) |   | -            |   |   | (19,353       | )
|Prepaid expenses                                |   | 5,706        |   |   | (22,741      | ) |   | (17,035       | )
|Accounts
      payable                          |   | 564,589      |   |   | 192,139      |   |   | 793,052       |  
|Accrued liabilities                             |   | 41,259       |   |   | 46,867       |   |   | 103,927       |  
|Due to related
      parties                    |   | 25,364       |   |   | 137,776      |   |   | 199,406       |  
|Net cash flows used in operations               |   | (584,362     | ) |   | (399,934     | ) |   | (1,018,839    | )
|                                                |   |              |   |   |              |   |   |               |  
|Investing                                       |   |              |   |   |              |   |   |               |  
|Purchase of equipment                           |   | (42,002      | ) |   | (33,119      | ) |   | (105,404      | )
|Net cash flows used in investing activities     |   | (42,002      | ) |   | (33,119      | ) |   | (105,404      | )
|                                                |   |              |   |   |              |   |   |               |  
|Financing                                       |   |              |   |   |              |   |   |               |  
|Share issuances for cash                        |   | 725,128      |   |   | 284,641      |   |   | 1,239,145     |  
|Net cash flows from financing activities        |   | 725,128      |   |   | 284,641      |   |   | 1,239,145     |  
|                                                |   |              |   |   |              |   |   |               |  
|Effect of exchange rate translation adjustments |   | (96,029      | ) |   | (14,567      | ) |   | (110,596      | )
|                                                |   |              |   |   |              |   |   |               |  
|Net Increase (Decrease) in Cash                 |   | 2,735        |   |   | (162,979     | ) |   | 4,306         |  
|Cash - Beginning
      of year                  |   | 1,571        |   |   | 164,550      |   |   | -             |  
|Cash - End of Year                              | $ | 4,306        |   | $ | 1,571        |   | $ | 4,306         |  
|                                                |   |              |   |   |              |   |   |               |  
|Income Taxes Paid                               | $ | -            |   | $ | -            |   | $ | -             |  
|Interest Paid                                   | $ | -            |   | $ | -            |   | $ | -             |  
|                                                |   |              |   |   |              |   |   |               |  
|Supplemental Schedule of Non-Cash               |   |              |   |   |              |   |   |               |  
|Investing and Financing Transactions            |   |              |   |   |              |   |   |               |  
|Shares issued for intellectual property         | $ | -            |   | $ | 1,500,000    |   | $ | 1,947,637     |  

- See Accompanying Notes -

F-6

---

|ITonis Inc.                               
|------------------------------------------
|(Formerly Kenshou Inc.)                   
|(A Development Stage Company)             
|Notes to Consolidated Financial Statements
|November 30, 2007                         
|US Funds                                  
|                                          
|                                          

|1. | Organization and Going Concern                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|-- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|   | Organization                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|   | ITonis Inc. (formerly Kenshou Inc.) (the "Company" or
        ITonis) was incorporated on July 5, 2005 as Kenshou Inc. under
        the laws of the State of Nevada. On December 2, 2005, the Company changed
        its name to ITonis Inc.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|   | As a full service video solution and backend platform
        service provider, the Company has made a shift in overall corporate strategy
        to enter into the Chinese market. As a part of this strategy, the Company
        is no longer advancing funds to ITonis CZ s.r.o., the Companys wholly
        owned subsidiary in the Czech Republic. On December 22, 2007, ITonis CZ
        s.r.o. declared bankruptcy and on January 15, 2008 the bankruptcy was
        registered in the Commercial Registrar of the Czech Republic.                                                                                                                                                                                                                                                                   
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|   | The Company intends to offer a full range of IPTV services
        for television, film and sport entertainment programming including premium
        entertainment channels, video on demand movies, and television shows in
        foreign and Chinese languages. The future implementation of this proposed
        project based on current understanding and scope as defined in the Memorandum
        of Understanding signed on the 16thof April, 2007 will allow
        for a full-scale deployment for millions of Chinese subscribers utilizing
        the Companys core technology.                                                                                                                                                                                                               
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|   | Going Concern and Liquidity Considerations                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|   | The accompanying consolidated financial statements have
        been prepared assuming that the Company will continue as a going concern,
        which contemplates, among other things, the realization of assets and
        satisfaction of liabilities in the normal course of business. As at November
        30, 2007, the Company has a working capital deficiency of $1,101,214 an
        accumulated deficit of $4,267,082 and has incurred an accumulated operating
        cash flow deficit of $1,018,839 since incorporation. The Company intends
        to continue funding operations through sales, debt, and equity financing
        arrangements, which may be insufficient to fund its capital expenditures,
        working capital and other cash requirements for the next fiscal year.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|   | Thereafter, the Company will be required to seek additional
        funds, either through sales, debt, and/or equity financing, to finance
        its long-term operations. The successful outcome of future activities
        cannot be determined at this time, and there is no assurance that, if
        achieved, the Company will have sufficient funds to execute its intended
        business plan or generate positive operating results. In response to these
        conditions, management intends to raise additional funds through future
        debt agreement and private placement offerings.                                                                                                                                                                                                
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|   | These factors, among others, raise substantial doubt
        about the Company's ability to continue as a going concern. The accompanying
        consolidated financial statements do not include any adjustments that
        might result from the outcome of this uncertainty except that the assets
        of ITonis CZ s.r.o. have been recorded at liquidation value resulting
        in a write down of assets totalling $76,234.                                                                                                                                                                                                                                                                                                                                                                       
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   

F-7

---

|ITonis Inc.                               
|------------------------------------------
|(Formerly Kenshou Inc.)                   
|(A Development Stage Company)             
|Notes to Consolidated Financial Statements
|November 30, 2007                         
|US Funds                                  
|                                          
|                                          

|2. | Significant Accounting Policies                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|-- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   | Basis of Consolidation                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   | On January 4, 2006 the Company incorporated a wholly
        owned subsidiary in the Czech Republic named ITonis CZ s.r.o. (ITonis
        CZ) for the purposes of operating the Companys development
        offices. These consolidated financial statements include the accounts
        of both companies since their respective incorporation dates. All intercompany
        balances and transactions have been eliminated.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   | Fiscal Period                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   | The Companys fiscal year ends on November 30.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   | Risks and Uncertainties                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   | The Company operates in an emerging industry that
        is subject to market acceptance and technological change. The Companys
        operations are subject to significant risks and uncertainties, including
        financial, operational, technological and other risks associated with
        operating an emerging business, including the potential risk of business
        failure.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   | Use of Estimates                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   | The preparation of financial statements in conformity
        with accounting principles generally accepted in the United States of
        America requires management to make certain estimates and assumptions
        that affect the reported amounts and timing of revenues and expenses,
        the reported amounts and classification of assets and liabilities, and
        disclosure of contingent assets and liabilities. These estimates and assumptions
        are based on the Companys historical results as well as managements
        future expectations. The Companys actual results could vary materially
        from managements estimates and assumptions.                                                                                                                                                                                                                                                                            
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   | Development Stage Company                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   | The Company is a development stage company as defined
        by SFAS No. 7. The Company is devoting substantially all of its present
        efforts to establish a new business. All losses accumulated since inception
        have been considered as part of the Companys development stage activities.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   | Cash and Cash Equivalents                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   | Cash and cash equivalents comprise highly liquid debt
        instruments purchased with an initial maturity of three months or less.
        As at November 30, 2007 and 2006, the Company had no cash equivalents.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   | Long-Lived Assets                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   | The Company has adopted SFAS No. 144, Accounting
        for the Impairment or Disposal of Long Lived Assets. In accordance
        with this statement, the Company reviews the carrying value of its long-lived
        assets whenever events or changes in circumstances indicate that carrying
        amounts may not be recoverable. If indicators of impairment exist, the
        Company would determine whether the estimated undiscounted sum of the
        future cash flows of such assets is less than its carrying amount. If
        less, an impairment loss would be recognized if, and to the extent that,
        the carrying amount of such assets exceeds their respective fair values.
        The Company would determine the fair value by using quoted market prices,
        if available, for such assets; or if quoted market prices are not available,
        the Company would discount the expected estimated future cash flows.

F-8

---

|ITonis Inc.                               
|------------------------------------------
|(Formerly Kenshou Inc.)                   
|(A Development Stage Company)             
|Notes to Consolidated Financial Statements
|November 30, 2007                         
|US Funds                                  
|                                          
|                                          

|2. | Significant Accounting Policies -Continued
      Equipment and Depreciation                                                                                                                              
|-- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                          
|   | Equipment is stated at cost. Depreciation is computed
        using the straight-line method to allocate the cost of depreciable assets
        over the estimated useful lives of the assets as follows:

| |                               | Estimated useful     
| | ----------------------------- | ---------------------
| |                               | life
      (in years)
| | Office and computer equipment | 3                    

Maintenance, repairs and minor renewals
  are charged directly to the statement of operations as incurred. When assets
  are disposed of, the related cost and accumulated depreciation thereon are removed
  from the financial statements and any resulting gain or loss is included in
  the statement of operations. At November 30, 2007, equipment held by Itonis
  CZ sro was written down by $37,651 to $0.

Revenue Recognition

Revenues are recognized when all of the
  following criteria have been met: persuasive evidence for an arrangement exists;
  delivery has occurred; the fee is fixed or determinable; and collection is reasonably
  assured. Upfront contract payments received from the sale of services not yet
  earned are initially recorded as deferred revenue on the balance sheet.

Revenue from time and material service
  contracts is recognized as the services are provided. Revenue from fixed price,
  long-term service or development contracts is recognized over the contract term
  based on the percentage of services that are provided during the year compared
  with the total estimated services to be provided over the entire contract. Losses
  on fixed price contracts are recognized during the year in which the loss first
  becomes apparent. Payment terms vary by contract.

Foreign Currency Translations

The Companys functional currency
  is Czech Koruna (CZK). The Companys reporting currency is
  the U.S. dollar. All transactions initiated in other currencies are re-measured
  into the functional currency as follows:

| | a) | Monetary assets and liabilities at the rate of exchange
        in effect at the balance sheet date,
| | -- | ----------------------------------------------------------------------------------------------------
| |    |                                                                                                     
| | b) | Non-monetary assets and liabilities, and equity at historical
        rates, and                    
| |    |                                                                                                     
| | c) | Revenue and expense items at the average rate of exchange
        prevailing during the year.       

Gains and losses on re-measurement are
  included in determining net income for the year

F-9

---

|ITonis Inc.                               
|------------------------------------------
|(Formerly Kenshou Inc.)                   
|(A Development Stage Company)             
|Notes to Consolidated Financial Statements
|November 30, 2007                         
|US Funds                                  
|                                          
|                                          

|2. | Significant Accounting Policies -Continued                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|-- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   | Foreign Currency Translations -Continued                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   | Translation of balances from the functional
        currency into the reporting currency is conducted as follows:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   | a)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   | b)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   | c)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   | Translation adjustments resulting from translation
        of balances from functional to reporting currency are accumulated as a
        separate component of shareholders equity as a component of comprehensive
        income or loss. Upon sale or liquidation of the net investment in the
        foreign entity the amount deferred will be recognized in income.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   | Advertising                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   | The Company expenses the cost of advertising
        when incurred. Advertising expenses are included in general and administrative
        expenses in the accompanying statements of operations.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   | Income Taxes                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   | Income taxes are accounted for using the asset
        and liability method. Deferred tax assets and liabilities are recognized
        for the future tax consequences attributable to differences between the
        financial statement carrying amounts of existing assets and liabilities
        and their respective tax bases and operating loss and tax credit carryforwards.
        Deferred tax assets and liabilities are measured using enacted tax rates
        expected to apply to taxable income in the years in which those temporary
        differences are expected to be recovered or settled. The effect on deferred
        tax assets and liabilities of a change in tax rates is recognized in income
        in the year that includes the enactment date. A valuation allowance is
        provided for significant deferred tax assets when it is more likely than
        not that such assets will not be recovered.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   | Fair Value of Financial Instruments and
        Risk Concentrations                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   | The carrying value of cash, accounts receivable,
        accounts payable, accrued liabilities and due to related parties approximate
        their fair value because of the short maturity of these instruments.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   | The Companys operations are in the Czech
        Republic and virtually all of its assets and liabilities give rise to
        significant exposure to market risks from changes in foreign currency
        rates arising from fluctuations in foreign exchange rates and the degree
        of volatility of these rates. Currently, the Company does not use derivative
        instruments to reduce its exposure to foreign currency risk.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   | Derivative Financial Instruments                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   | The Company was not a party to any derivative
        financial instruments during any of the reported fiscal periods.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                

F-10

---

|ITonis Inc.                               
|------------------------------------------
|(Formerly Kenshou Inc.)                   
|(A Development Stage Company)             
|Notes to Consolidated Financial Statements
|November 30, 2007                         
|US Funds                                  
|                                          
|                                          

|2. | Significant Accounting Policies -Continued                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|-- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   | Segment Reporting                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   | SFAS No. 131, "Disclosures about Segments of an Enterprise
        and Related Information, requires entity-wide disclosures about
        the products and services an entity provides, the material countries in
        which it holds assets and reports revenues and its major customers. The
        Company currently operates in two segments, Czech Republic and United
        States (Note 6).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   | Website Development Costs                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   | The Company has adopted Emerging Issues Task Force
        Issue (EITF) 00-2 Accounting for Web Site Development
        Costs, which reached a consensus that, regardless of whether the
        website planning activities specifically relate to software, all costs
        incurred in the planning stage should be expensed as incurred. However,
        costs incurred in the operation stage that involve providing additional
        functions or features to the website should be accounted for as, in effect,
        new software. That is, costs of upgrades and enhancements that add functionality
        should be expensed or capitalized based on the general model of SOP 98-1
        and FASB Statement 86.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   | Stock-based Compensation                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   | Effective March 1, 2006, the Company adopted the provisions
        of Statement of Financial Accounting Standards (SFAS) No.
        123(R), Share-based Payment (SFAS 123(R)), which
        establishes accounting for equity instruments exchanged for employee services.
        Under the provisions of SFAS 123(R), stock-based compensation cost is
        measured at the grant date, based on the calculated fair value of the
        award, and is recognized as an expense over the employees requisite
        service period (generally the vesting period of the equity grant). Before
        March 1, 2006, the Company accounted for stock-based compensation to employees
        in accordance with Accounting Principles Board Opinion No. 25, Accounting
        for Stock Issued to Employees, and complied with the disclosure
        requirements of SFAS No. 123, Accounting for Stock-Based Compensation
        (SFAS 123). The Company adopted SFAS 123(R) using the modified
        prospective method, which required the Company to record compensation
        expense over the vesting period for all awards granted after the date
        of adoption, and for the unvested portion of previously granted awards
        that remain outstanding at the date of adoption. Accordingly, financial
        statements for the periods prior to March 1, 2006 have not been restated
        to reflect the fair value method of expensing share-based compensation.
        Adoption of SFAS 123(R) does not change the way the Company accounts for
        share-based payments to non- employees, with guidance provided by SFAS
        123 (as originally issued) and EITF Issue No. 96-18, Accounting
        for Equity Instruments That Are Issued to Other Than Employees for Acquiring,
        or in Conjunction with Selling, Goods or Services.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   | Comprehensive Income                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   | The Company has adopted SFAS 130, "Reporting
        Comprehensive Income, which establishes standards for reporting
        and display of comprehensive income and its components in a full set of
        general-purpose financial statements. At November 30, 2007, comprehensive
        loss comprised the net loss for the year and foreign currency translation
        adjustments.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   

F-11

---

|ITonis Inc.                               
|------------------------------------------
|(Formerly Kenshou Inc.)                   
|(A Development Stage Company)             
|Notes to Consolidated Financial Statements
|November 30, 2007                         
|US Funds                                  
|                                          
|                                          

|2. | Significant Accounting Policies Continued                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|-- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|   | Loss per Share                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|   | The Company computes net loss per common share using
        SFAS No. 128 "Earnings Per Share." Basic loss per common share is computed
        based on the weighted average number of shares outstanding for the reporting
        period. Diluted loss per share is computed by dividing net loss by the
        weighted average shares outstanding assuming all dilutive potential common
        shares were issued. There were no dilutive potential common shares at
        November 30, 2007 and 2006. The Company has incurred net losses and has
        no potentially dilutive common shares, therefore; basic and diluted loss
        per share are the same. Additionally, for the purposes of calculating
        diluted loss per share, there were no adjustments to net loss.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|   | Software Costs                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|   | The Companys policy is that software development
        costs related to the product line are charged to expense as incurred in
        accordance with SFAS No. 86, "Accounting for the Costs of Computer Software
        to Be Sold, Leased, or Otherwise Marketed." This Statement specifies that
        costs incurred internally in creating a computer software product shall
        be charged to expense when incurred as research and development until
        technological feasibility has been established for the product. Technological
        feasibility is established upon completion of a detail program design
        or, in its absence, completion of a working model. Technological feasibility
        has not been established at November 30, 2007.             
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|   | Costs for internal use software, whether developed
        or obtained, are assessed to determine whether they should be capitalized
        or expensed in accordance with American Institute of Certified Public
        Accountants' Statement ("SOP") 98-1, "Accounting for the Costs of Computer
        Software Developed or Obtained for Internal Use." Capitalized software
        costs, if any, will be reflected as rights and technology on the balance
        sheet. During the periods, the Company expensed all software development
        costs.                                                                                                                                                                                                                             
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|   | Obligations Under Capital Leases                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|   | Leases are classified as either capital or operating.
        Leases that transfer substantially all of the benefits and risks of ownership
        of property to the Company are accounted for as capital leases. At the
        time a capital lease is entered into, an asset is recorded with its related
        long-term financing. As at the current year-end, the Company does not
        have any capital lease obligations. Payments under operating leases are
        expensed as incurred.                                                                                                                                                                                                                                                                                        

F-12

---

|ITonis Inc.                               
|------------------------------------------
|(Formerly Kenshou Inc.)                   
|(A Development Stage Company)             
|Notes to Consolidated Financial Statements
|November 30, 2007                         
|US Funds                                  
|                                          
|                                          

|2. | Significant Accounting Policies Continued                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|-- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   | Recently Adopted Accounting Standards                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   | In December 2007, the FASB issued SFAS No. 141 (Revised)
        Business Combinations. SFAS 141 (Revised) establishes principles
        and requirements for how the acquirer of a business recognizes and measures
        in its financial statements the identifiable assets acquired, the liabilities
        assumed, and any noncontrolling interest in the acquiree. The statement
        also provides guidance for recognizing and measuring the goodwill acquired
        in the business combination and determines what information to disclose
        to enable users of the financial statements to evaluate the nature and
        financial effects of the business combination. The guidance will become
        effective for the fiscal year beginning after December 15, 2008. The Company
        has not yet evaluated the impact, if any, that SFAS 141R will have on
        its financial statements. Determination of the ultimate effect of this
        statement will depend on the Companys structure at the date of adoption.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   | In December 2007, the FASB issued SFAS No. 160, Noncontrolling
        Interests in Consolidated Financial Statements. This Statement amends
        ARB 51 to establish accounting and reporting standards for the noncontrolling
        (minority) interest in a subsidiary and for the deconsolidation of a subsidiary.
        It clarifies that a noncontrolling interest in a subsidiary is an ownership
        interest in the consolidated entity that should be reported as equity
        in the consolidated financial statements. The Company currently has no
        entities or arrangements that will be affected by the adoption of SFAS
        160. However, determination of the ultimate effect of this pronouncement
        will depend on the Companys structure at the date of adoption.                                                                                                                                                                                                                                             
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   | In February 2007, the FASB issued SFAS No. 159, The
        Fair Value Option for Financial Assets and Financial Liabilities
        (SFAS 159). SFAS 159 allows the Company to choose to measure many financial
        assets and financial liabilities at fair value. Unrealized gains and losses
        on items for which the fair value option has been elected are reported
        in earnings. SFAS 159 is effective for fiscal years beginning after November
        15, 2007. The Company is currently evaluating the requirements of SFAS
        159 and the potential impact on the Companys financial statements.                                                                                                                                                                                                                                                                                                                                                                                                                              
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   | In September 2006, the Securities and Exchange Commission
        issued Staff Accounting Bulletin No. 108, Considering the Effects of Prior
        Year Misstatements when Quantifying Misstatements in Current Year Financial
        Statements (SAB 108), which addresses how to quantify the
        effect of financial statement errors. The provisions of SAB 108 become
        effective as of the end of our 2007 fiscal year. The adoption of SAB 108
        did not have a material effect on the Company's reported financial position
        or results of operations.                                                                                                                                                                                                                                                                                                                                                                                                                                                                         

F-13

---

|ITonis Inc.                               
|------------------------------------------
|(Formerly Kenshou Inc.)                   
|(A Development Stage Company)             
|Notes to Consolidated Financial Statements
|November 30, 2007                         
|US Funds                                  
|                                          
|                                          

|2. | Significant Accounting Policies -Continued
      Recently Adopted Accounting Standards- Continued                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|-- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   | In September 2006, the FASB issued SFAS No. 157, "Fair
        Value Measurement" ("SFAS 157"). The Statement provides guidance for using
        fair value to measure assets and liabilities. The Statement also expands
        disclosures about the extent to which companies measure assets and liabilities
        at fair value, the information used to measure fair value, and the effect
        of fair value measurement on earnings. This Statement applies under other
        accounting pronouncements that require or permit fair value measurements.
        This Statement does not expand the use of fair value measurements in any
        new circumstances. Under this Statement, fair value refers to the price
        that would be received to sell an asset or paid to transfer a liability
        in an orderly transaction between market participants in the market in
        which the entity transacts. SFAS 157 is effective for fiscal years beginning
        after November 15, 2007. The adoption of SFAS 157 is not expected to have
        a material impact on the Companys financial position, results of
        operation or cash flows.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   | In June 2006, the FASB issued FIN. 48, Accounting
        for Uncertainty in Income Taxes (an interpretation of FASB Statement No.
        109) (FIN 48), which is effective for fiscal years beginning
        after December 15, 2006. This interpretation was issued to clarify the
        accounting for uncertainty in income taxes recognized in the financial
        statements by prescribing a recognition threshold and measurement attribute
        for the financial statement recognition and measurement of a tax position
        taken or expected to be taken in a tax return. The Company is currently
        evaluating the potential impact of FIN 48, but it is not expected to have
        a material impact on the Companys financial position, results of
        operations or cash flows.                                                                                                                                                                                                                                                                                                                                                            
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|3. | Equipment                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   | Details are as follows:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  

| |                                |   |        |  |   |              |   |   | Net Book     |  |   | Net Book     | 
| | ------------------------------ | - | ------ |  | - | ------------ | - | - | ------------ |  | - | ------------ | 
| |                                |   |        |  |   |              |   |   | Value        |  |   | Value        | 
| |                                |   |        |  |   | Accumulated  |   |   | November 30, |  |   | November 30, | 
| |                                |   | Cost   |  |   | Depreciation |   |   | 2007         |  |   | 2006         | 
| | Office equipment and furniture | $ | 21,500 |  | $ | (1,571       | ) | $ | 19,929       |  | $ | 42,712       | 
| | Effect of exchange rate        |   |        |  |   |              |   |   |              |  |   |              | 
| | changes on equipment           |   | -      |  |   | -            |   |   | -            |  |   | 5,147        | 
| |                                | $ | 21,500 |  | $ | (1,571       | ) | $ | 19,929       |  | $ | 47,859       | 
| |                                |   |        |  |   |              |   |   |              |  |   |              | 

F-14

---

|ITonis Inc.                               
|------------------------------------------
|(Formerly Kenshou Inc.)                   
|(A Development Stage Company)             
|Notes to Consolidated Financial Statements
|November 30, 2007                         
|US Funds                                  
|                                          
|                                          

|4. | Software Costs
|-- | --------------
|   |               
|   | a)            
|   |               
|   | b)            
|   |               
|   |               
|5. | Commitments   
|   |               
|   | a)            
|   |               
|   |               
|   |               
|   | b)            

F-15

---

|ITonis Inc.                               
|------------------------------------------
|(Formerly Kenshou Inc.)                   
|(A Development Stage Company)             
|Notes to Consolidated Financial Statements
|November 30, 2007                         
|US Funds                                  
|                                          
|                                          

|5. | Commitments -Continued
|-- | ----------------------

| |    | Upon agreement of both parties, the contract will continue
        on a month-to-month basis requiring a payment of $4,000 per month. Specific
        services that are outside the terms of the contract will be charged at
        $200 per hour or $1,500 per full workday. Termination of the contract
        will occur upon written notice to either party by the other party. To
        November 30, 2007, no further work has been required.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| | -- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| | c) | By agreement dated September 1, 2007, the
        Company entered into a three-year Employment Agreement with a director
        of the Company. In consideration the Company has agreed pay the director
        an annual salary of $150,000 and to issue to him an aggregate of 14,000,000
        shares consisting of a combination of option grants and share grants.
        The option and share grants are to be issued pursuant to separate stock
        and option grant agreements that have not been executed as of November
        30, 2007. The Employment Agreement was amended on January 2, 2008 (Note
        10c).                                                                                                                                                                                                                                                                                                                                               
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| | d) | By agreement dated September 1, 2007, the
        Company entered into a three-year Employment Agreement with a director
        of the Company. In consideration the Company has agreed pay the director
        an annual salary of $100,000 and to issue to him an aggregate of 7,000,000
        shares consisting of a combination of option grants and share grants.
        The option and share grants are to be issued pursuant to separate stock
        and option grant agreements that have not been executed as of November
        30, 2007. The Employment Agreement was amended on January 2, 2008 (Note
        10d).                                                                                                                                                                                                                                                                                                                                                
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| | e) | On September 8, 2007, the Company entered into a share
        purchase agreement (the Share Purchase Agreement) with iOcean
        Media Limited (iOcean) and Aquos Media Limited (Aquos),
        a wholly owned subsidiary of iOcean. iOcean is engaged in the business
        of assembling licenses and permits for Internet television broadcasting
        in China and the resale of authorized Chinese lottery gaming products.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| |    | The Share Purchase Agreement provides that the Company
        acquire all of the issued and outstanding shares of Aquos in consideration
        for the issuance to iOcean of a number of shares of the Companys
        common stock such that iOcean will own 49% of the Companys issued
        and outstanding shares immediately following the completion of the acquisition.
        In addition, the Company is to issue additional shares to iOcean equal
        to 25% of the original number of shares issued on the date upon which
        the gaming portion of the license and permits held by Aquos is live and
        selling lottery tickets. iOcean has agreed to enter into a voting agreement
        that will govern the voting of its shares for a period of one year following
        the date of closing. All shares issued to iOcean will be restricted
        securities under the Securities Act of 1933.                                        
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| |    | Following execution of this Agreement, iOcean will use
        its best efforts to ensure that the licenses and permits required for
        the conduct of the planned television over the Internet business, as specified
        in the Share Purchase Agreement, are secured by Aquos by no later than
        October 31, 2007. In the event that the acquisition is completed prior
        to these licenses and permits being secured and Aquos has not secured
        these licenses and permits by October 31, 2007, the Company has the right
        under an option agreement to be executed on closing to re-purchase the
        shares issued to iOcean on closing by delivering notice of exercise of
        the option together with an assignment of the shares of Aquos acquired
        to iOcean. Upon exercise this option, all shares issued to iOcean will
        be deemed to be cancelled and the Company will have no further interest
        in Aquos.
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| |    | This Agreement was amended on January 21, 2008 (Note
        10f).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        

F-16

---

|ITonis Inc.                               
|------------------------------------------
|(Formerly Kenshou Inc.)                   
|(A Development Stage Company)             
|Notes to Consolidated Financial Statements
|November 30, 2007                         
|US Funds                                  
|                                          
|                                          

|6. | Segmented Information                                                        
|-- | -----------------------------------------------------------------------------
|   |                                                                              
|   | Details on a geographic basis as at November 30, 2007
        are as follows:

| |                   |   | Czech    |   |   |          |   |   |            |  
| | ----------------- | - | -------- | - | - | -------- | - | - | ---------- | -
| |                   |   | Republic |   |   | U.S.A.   |   |   | Total      |  
| | Assets            | $ | -        |   | $ | 24,889   |   | $ | 24,889     |  
| | Revenue           | $ | 206,828  |   | $ | -        |   | $ | 206,828    |  
| | Loss for the year | $ | (813,212 | ) | $ | (585,114 | ) | $ | (1,398,326 | )

Details on a geographic basis as at November
  30, 2006 are as follows:

| |                   |   | Czech    |   |   |            |   |   |            |  
| | ----------------- | - | -------- | - | - | ---------- | - | - | ---------- | -
| |                   |   | Republic |   |   | U.S.A.     |   |   | Total      |  
| | Assets            | $ | 73,623   |   | $ | 6,331      |   | $ | 79,954     |  
| | Revenue           | $ | 24,351   |   | $ | -          |   | $ | 24,351     |  
| | Loss for the year | $ | (437,093 | ) | $ | (1,865,185 | ) | $ | (2,302,278 | )

|   |                                                                                                         
|-- | --------------------------------------------------------------------------------------------------------
|7. | Related Party Balances and Transactions                                                                 
|   |                                                                                                         
|   | Related party transactions not disclosed elsewhere
        in these financial statements are as follows:
|   |                                                                                                         
|   | a)                                                                                                      
|   |                                                                                                         
|   | b)                                                                                                      
|   |                                                                                                         
|   |                                                                                                         
|   |                                                                                                         
|   |                                                                                                         
|   |                                                                                                         
|   |                                                                                                         
|   |                                                                                                         
|   | c)                                                                                                      
|   |                                                                                                         
|   | d)                                                                                                      
|   |                                                                                                         
|   | e)                                                                                                      
|   |                                                                                                         
|   | f)                                                                                                      
|   |                                                                                                         
|   | g)                                                                                                      

| | These transactions were incurred
        in the normal course of operations and were measured at the exchange amount
        of consideration established and agreed to by the related parties.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |                                                                                                                                                                                                

F-17

---

|ITonis Inc.                               
|------------------------------------------
|(Formerly Kenshou Inc.)                   
|(A Development Stage Company)             
|Notes to Consolidated Financial Statements
|November 30, 2007                         
|US Funds                                  
|                                          
|                                          

|8. | Capital Stock
|-- | -------------
|   |              
|   | a)           
|   |              
|   | b)           
|   |              
|   | c)           
|   |              
|   | d)           
|   |              
|   | e)           
|   |              
|   | f)           
|   |              
|   | g)           
|   |              
|   | h)           
|   |              
|   | i)           
|   |              
|   | j)           
|   |              
|   | k)           
|   |              
|   | l)           

F-18

---

|ITonis Inc.                               
|------------------------------------------
|(Formerly Kenshou Inc.)                   
|(A Development Stage Company)             
|Notes to Consolidated Financial Statements
|November 30, 2007                         
|US Funds                                  
|                                          
|                                          

|8. | Capital Stock-Continued
|-- | -----------------------
|   |                        
|   | m)                     
|   |                        
|   |                        
|   |                        
|   |                        
|   |                        
|   |                        
|   |                        
|   |                        

| |                                                       |  |           |  |   | Weighted | 
| | ----------------------------------------------------- |  | --------- |  | - | -------- | 
| |                                                       |  |           |  |   | average  | 
| |                                                       |  | Number of |  |   | exercise | 
| |                                                       |  | options   |  |   | price    | 
| |                                                       |  |           |  |   |          | 
| | Outstanding and exercisable at 1 December 2006        |  | 1,500,000 |  | $ | 0.267    | 
| |                                                       |  |           |  |   |          | 
| | Granted                                               |  | 1,500,000 |  |   | 0.267    | 
| | Exercised                                             |  | -         |  |   | -        | 
| | Expired / Cancelled                                   |  | -         |  |   | -        | 
| |                                                       |  |           |  |   |          | 
| | Outstanding and exercisable at 30 November
      2007 |  | 3,000,000 |  | $ | 0.267    | 

The options granted during the year
  ended November 30, 2007 were valued using the Black-Scholes option pricing model
  with the following assumptions:

| |                                 | 2007             | 2006   
| | ------------------------------- | ---------------- | -------
| | Expected dividend yield         | 0.00%            | 0.00%  
| | Expected stock price volatility | 83%              | 77%    
| | Risk-free interest rate         | 4.82%            | 4.88%  
| | Expected life of options        | 1.92
      years | 3 years

Because the shares of the Company had
  not begun trading on any recognized stock exchange when the options were granted,
  there is no trading history to establish the expected volatility. The Company
  has used the average volatility of public companies in the same industry or
  considered to be comparable.

F-19

---

|ITonis Inc.                               
|------------------------------------------
|(Formerly Kenshou Inc.)                   
|(A Development Stage Company)             
|Notes to Consolidated Financial Statements
|November 30, 2007                         
|US Funds                                  
|                                          
|                                          

|8. | Capital Stock-Continued
|-- | -----------------------
|   |                        
|   | m)                     
|   |                        
|   |                        
|   |                        
|   | n)                     
|   |                        
|   |                        

| |                                                       |  |           |  |   | Weighted | 
| | ----------------------------------------------------- |  | --------- |  | - | -------- | 
| |                                                       |  |           |  |   | average  | 
| |                                                       |  | Number of |  |   | exercise | 
| |                                                       |  | warrants  |  |   | price    | 
| |                                                       |  |           |  |   |          | 
| | Outstanding and exercisable at 1 December 2006        |  | -         |  | $ | -        | 
| |                                                       |  |           |  |   |          | 
| | Granted                                               |  | 1,000,000 |  |   | 0.25     | 
| | Exercised                                             |  | -         |  |   | -        | 
| | Expired / Cancelled                                   |  | -         |  |   | -        | 
| |                                                       |  |           |  |   |          | 
| | Outstanding and exercisable at 30 November
      2007 |  | 1,000,000 |  | $ | 0.25     | 
| |                                                       |  |           |  |   |          | 

F-20

---

|ITonis Inc.                               
|------------------------------------------
|(Formerly Kenshou Inc.)                   
|(A Development Stage Company)             
|Notes to Consolidated Financial Statements
|November 30, 2007                         
|US Funds                                  
|                                          
|                                          

|9. | Income Taxes
|-- | ------------

| | a) | A reconciliation of income taxes at statutory rates
        with the reported taxes is as follows:
| | -- | --------------------------------------------------------------------------------------------------

| |                                                        |   | November 30, |   |   | November 30, |  
| | ------------------------------------------------------ | - | ------------ | - | - | ------------ | -
| |                                                        |   | 2007         |   |   | 2006         |  
| |                                                        |   |              |   |   |              |  
| | Loss before income taxes                               | $ | (1,398,326   | ) | $ | (2,302,278   | )
| | US statutory tax rate                                  |   | 34%          |   |   | 34%          |  
| |                                                        |   |              |   |   |              |  
| | Expected income tax (recovery)                         | $ | (475,431     | ) | $ | (782,775     | )
| | Items (deductible) not deductible for income
      tax |   |              |   |   |              |  
| | purposes                                               |   | 122,542      |   |   | 543,172      |  
| | Change in valuation allowance                          |   | 211,414      |   |   | 724,064      |  
| | Foreign tax rates different from statutory rate        |   | 227,939      |   |   | 56,822       |  
| | Unrecognized tax losses                                |   | (86,464      | ) |   | (541,283     | )
| |                                                        |   |              |   |   |              |  
| | Total income taxes (recovery)                          | $ | -            |   | $ | -            |  
| |                                                        |   |              |   |   |              |  
| | Represented by:                                        |   |              |   |   |              |  
| | Current income tax                                     | $ | -            |   | $ | -            |  
| | Future income tax (recovery)                           | $ | -            |   | $ | -            |  

| | b) | The significant components of the Company's future income
        tax assets and liabilities are as follows:
| | -- | ------------------------------------------------------------------------------------------------------------

| |                                                      |   | November 30, |   |   | November 30, |  
| | ---------------------------------------------------- | - | ------------ | - | - | ------------ | -
| |                                                      |   | 2007         |   |   | 2006         |  
| |                                                      |   |              |   |   |              |  
| | Deferred income tax assets                           |   |              |   |   |              |  
| | Non-capital losses                                   | $ | 536,839      |   | $ | 289,205      |  
| | Intellectual property and equipment costs deductible |   |              |   |   |              |  
| | for tax purposes                                     |   | 591,242      |   |   | 627,462      |  
| |                                                      |   |              |   |   |              |  
| |                                                      |   | 1,128,081    |   |   | 916,667      |  
| | Valuation allowance                                  |   | (1,128,081   | ) |   | (916,667     | )
| |                                                      |   | -            |   |   | -            |  

The Company has accumulated net operating
  losses for U.S. federal income tax purposes of approximately $1,004,000 (2006
  - $583,000) available to offset against taxable income in future years, which,
  if unutilized will expire through to 2027.

The Company also has accumulated net
  operating losses for Czech income tax purposes of approximately $931,000 (2006
  - $515,000) available to offset against taxable income in future years, which,
  if unutilized will expire through to 2012.

In addition, the Company has $1,702,000
  (2006 - 1,831,000) of intellectual property costs deductible for tax purposes
  at approximately $130,000 per year.

F-21

---

|ITonis Inc.                               
|------------------------------------------
|(Formerly Kenshou Inc.)                   
|(A Development Stage Company)             
|Notes to Consolidated Financial Statements
|November 30, 2007                         
|US Funds                                  
|                                          
|                                          

|9. | Income Taxes-Continued
|-- | ----------------------

The potential future tax benefits of
  the net operating losses have not been recognized by the Company in these financial
  statements due to uncertainty of their realization. When the future utilization
  of some portion of the carryforwards is determined not to be more likely
  than not, a valuation allowance is provided to reduce the recorded tax
  benefits from such assets.

|    |                  
|--- | -----------------
|10. | Subsequent Events
|    |                  
|    | a)               

| | b) | On December 22, 2007, ITonis CZ s.r.o. declared bankruptcy
        and on January 15, 2008 the bankruptcy was registered in the Commercial
        Registrar of the Czech Republic.
| | -- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | c) | By agreement dated January 2, 2008, the Company
        entered into an amended three-year Employment Agreement with a director
        of the Company. In consideration the Company has agreed pay the director
        an annual salary of $300,000 and to issue to him an aggregate of 25,000,000
        shares of our common stock in a combination of option grants and share
        grants (Note 5c).
| | -- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | d) | By agreement dated January 2, 2008, the Company
        entered into an amended three-year Employment Agreement with a director
        of the Company. In consideration the Company has agreed pay the director
        an annual salary of $200,000 and to issue to him an aggregate of 10,000,000
        shares of our common stock in a combination of option grants and share
        grants (Note 5d).
| | -- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

F-22

---

|ITonis Inc.                               
|------------------------------------------
|(Formerly Kenshou Inc.)                   
|(A Development Stage Company)             
|Notes to Consolidated Financial Statements
|November 30, 2007                         
|US Funds                                  
|                                          
|                                          

|10. | Subsequent Events-Continued
|--- | ---------------------------
|    |                            
|    | e)                         

| |                   |   | Amount  | 
| | ----------------- | - | ------- | 
| |                   |   |         | 
| | March 15, 2008    | $ | 80,000  | 
| | April 1, 2008     |   | 180,000 | 
| | May 1, 2008       |   | 50,000  | 
| | June 1, 2008      |   | 50,000  | 
| | July 1, 2008      |   | 50,000  | 
| | August 1, 2008    |   | 50,000  | 
| | September 1, 2008 |   | 50,000  | 
| | October 1, 2008   |   | 50,000  | 
| | November 1, 2008  |   | 50,000  | 
| |                   |   |         | 
| |                   | $ | 610,000 | 

| | f) | On January 21, 2008, the Company entered into an amended
        and restated share purchase agreement with iOcean Media Limited and Aquos
        Media Limited, under which the acquisition was completed in consideration
        for the issuance of 16,138,370 shares on January 29, 2008 (Note
        5e).                                                                                                                                                                                                                                           
| | -- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| | g) | On January 2, 2008, the Company entered into a consulting
        agreement with Karada Ltd. (Karada), whereby Karada will provide
        services as a non-exclusive finder to the Corporation on a third party,
        non-agency basis to assist the Company in locating qualified investors
        for the purpose of investing into the Companys business, pursuant
        to a finders fee agreement. The Company issued 4,000,000 shares
        to Karada on January 31, 2008 as full consideration for the services to
        be rendered.
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| | h) | On January 2, 2008, the Company entered into a private
        placement subscription agreement with Karada for the purchase of 2,500,000
        shares at a price of $0.05 per share for total cash proceeds of $125,000.
        The shares were issued on January 31, 2008.                                                                                                                                                                                                                                                                             
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| | i) | On February 5, 2008, the Company issued 1,000,000 shares
        to Westport Strategic Partners Inc. in satisfaction of a $100,000 liability
        due on November 30, 2007. (Note 8f)                                                                                                                                                                                                                                                                                                                                                                    
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| | j) | On February 11, 2008, the Company issued shares to a
        private investor for the purchase of 12,500,000 shares at $0.02 per share
        for total cash proceeds of $250,000.                                                                                                                                                                                                                                                                                                                                                                         
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| | k) | On February 14, 2008, the Company issued shares to a
        private investor for the purchase of 880,000 shares at $0.25 per share
        for total cash proceeds of $220,000.                                                                                                                                                                                                                                                                                                                                                                            
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             

F-23

---

|ITEM 8. | CHANGES IN AND
      DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
      FINANCIAL DISCLOSURE
|------- | ------------------------------------------------------------------------------------------------

Resignation of Staley, Okada & Partners, Chartered
Accountants

We received notice on December 5, 2006 of the immediate
resignation of Staley, Okada & Partners, Chartered Accountants (Staley,
Okada) as our principal independent accountant. The resignation followed a
transaction whereby certain assets of Staley, Okada were sold to
PricewaterhouseCoopers and a number of the professional staff and partners of
Staley, Okada joined PricewaterhouseCoopers. Our board of directors accepted the
resignation of Staley, Okada as principal independent accountant.

The report of Staley, Okada dated February 17, 2006 (except as
to Note 9, which is as of June 16, 2006) on our balance sheet at November 30,
2005 and the related consolidated statements of changes in stockholders equity,
operations, and cash flows for the period from incorporation (July 5, 2005) to
November 30, 2005 did not contain an adverse opinion or disclaimer of opinion,
nor was it modified as to uncertainty, audit scope, or accounting principles,
other than to state that there is substantial doubt as to our ability to
continue as a going concern.

In connection with the audit of the period from incorporation
(July 5, 2005) to November 30, 2005 and during the subsequent interim period
through to the date of their resignation, there were no disagreements between us
and Staley, Okada on any matter of accounting principles or practices, financial
statement disclosure, or auditing scope or procedures, which disagreements if
not resolved to the satisfaction of Staley, Okada would have caused them to make
reference thereto in their reports on our audited financial statements.

We provided Staley, Okada with a copy of the foregoing
disclosures and requested in writing that Staley, Okada furnish us with a letter
addressed to the Securities and Exchange Commission (the SEC) stating whether
or not they agree with such disclosures. We received the requested letter from
Staley, Okada wherein they have confirmed their agreement to our disclosures. A
copy of Staley, Okadas letter has been filed as an exhibit to our current
report on Form 8-K filed with the SEC on December 11, 2006.

Engagement of Moores Rowland Audit s.r.o.

On January 22, 2007, we engaged Moores Rowland Audit s.r.o.
(Moores Rowland) as our principal independent accountants for the purpose of
auditing our financial statements for the fiscal year ended November 30,
2006.

Engagement of Danziger Hochman Partners LLP, Chartered
Accountants

Following the engagement of Moores Rowland as our principal
independent accountants, we subsequently determined to engage Danziger Hochman
Partners LLP (DHP) as our principal independent accountant. We have continued
the engagement of Moores Rowland for the purpose of auditing the financial
statements of our subsidiary, ITonis CZ s.r.o., a Czech Republic corporation
(ITonis CZ). On February 9, 2007, we entered into an engagement letter with
DHP with respect to the engagement of DHP as our principal independent
accountants for the purpose of auditing our financial statements for fiscal year
ended November 30, 2006. Moores Rowland resigned as independent auditor
concurrently on February 9, 2007. The decision to engage DHP as principal
independent accountant was approved by our board of directors.

Moores Rowland has not issued any audit report on the financial
statements of the Company. During the period from the engagement of Moores
Rowland as principal independent auditor on January 22, 2007 to February 9,
2007, there were no disagreements between us and Moores Rowland on any matter of
accounting principles or practices, financial statement disclosure, or auditing
scope or procedures, which disagreements if not resolved to the satisfaction of
Moores Rowland would have caused them to make reference thereto in their reports
on our audited financial statements.

28

---

We provided Moores Rowland with a copy of the foregoing
disclosures and has requested in writing that Moores Rowland furnish us with a
letter addressed to the SEC stating whether or not they agree with such
disclosures. We received the requested letter from Moores Rowland which was
filed with the SEC on February 23, 2007 by way of an amendment to our current
report on Form 8-K.

|ITEM 8A. | CONTROLS AND PROCEDURES
|-------- | -----------------------

Evaluation of Disclosure Controls and Procedures

Disclosure controls and procedures are controls and other
procedures that are designed to ensure that information required to be disclosed
by our company is recorded, processed, summarized and reported, within the time
periods specified in the rules and forms of the Securities and Exchange
Commission. Our Chief Executive Officer and Chief Financial Officer, Thomas N.
Roberts, is responsible for establishing and maintaining disclosure controls and
procedures for our company.

Our management has evaluated the effectiveness of our
disclosure controls and procedures as of November 30, 2007 (under the
supervision and with the participation of our Chief Executive Officer and the
Chief Financial Officer), pursuant to Rule 13a-15(b) promulgated under the
Securities Exchange Act of 1934, as amended. As part of such evaluation,
management considered the matters discussed below relating to internal control
over financial reporting. Based on this evaluation, our companys Chief
Executive Officer and Chief Financial Officer concluded that our companys
disclosure controls and procedures were effective as of November 30, 2007.

No Changes in Internal Control over Financial
Reporting

The term internal control over financial reporting is defined
as a process designed by, or under the supervision of, the registrants
principal executive and principal financial officers, or persons performing
similar functions, and effected by the registrants board of directors,
management and other personnel, 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 and includes those policies and procedures that:

- pertain to the maintenance of records that in reasonable detail accurately
  and fairly reflect the transactions and dispositions of the assets of the
  registrant;
- 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
  registrant are being made only in accordance with authorizations of management
  and directors of the registrant; and
- provide reasonable assurance regarding prevention or timely detection of
  unauthorized acquisition, use or disposition of the registrants assets that
  could have a material effect on the financial statements.

Based upon the evaluation performed by our management (under
the supervision and with the participation of our Chief Executive Officer and
Chief Financial Officer), there has been no change in our internal control over
financial reporting during the fourth quarter of 2007 that has materially
affected, or is reasonably likely to materially affect, our internal control
over financial reporting.

Inherent Limitation of the Effectiveness of Internal
Control

Our internal control system is designed to provide reasonable
assurance to our management and board of directors regarding the preparation and
fair presentation of published financial statements. All internal control
systems, no matter how well designed, have inherent limitations. Therefore, even
those systems determined to be effective can provide only reasonable assurance
with respect to financial statement

29

---

preparation and presentation. Further because of changes in
conditions, the effectiveness of internal control may vary over time.

|ITEM 8B. | OTHER INFORMATION
|-------- | -----------------

Not applicable.

PART III

|ITEM 9. | DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS, CONTROL
      PERSONS AND CORPORATE GOVERNANCE; COMPLIANCE WITH SECTION 16(A)
      OF THE EXCHANGE ACT
|------- | -------------------------------------------------------------------------------------------------------------------------------------------------

|Directors:                |     |                                                                                         
|------------------------- | --- | ----------------------------------------------------------------------------------------
|                          |     |                                                                                         
|Name of Director          | Age |                                                                                         
|Thomas Neal Roberts       | 38  |                                                                                         
|Antonin Kral              | 27  |                                                                                         
|Iain Mackenzie Fidlin     | 47  |                                                                                         
|                          |     |                                                                                         
|Executive Officers:       |     |                                                                                         
|                          |     |                                                                                         
|Name of Executive Officer | Age | Office                                                                                  
|Thomas Neal Roberts       | 38  | President, Chief Executive
      Officer and Chief Financial Officer                    
|Antonin Kral              | 27  | Chief Technical Officer                                                                 
|Lawrence Haber            | 49  | Senior Vice President, General
      Counsel, Chief Administrative Officer and Secretary

The following describes the business experience of our
directors and executive officers. Mr. Roberts, Mr. Kral and Mr. Haber are not
and have not in the past been directors of any reporting company under the
Exchange Act or any other publicly traded company.

Thomas Neal Roberts has been our President, Chief
Executive Officer and Chief Financial Officer since July 2, 2007 and was our
Secretary from July 2, 2007 to August 27, 2007. Mr. Roberts has over 12 years of
hands on experience with incubating various types of technology companies
including content aggregation, media distribution, technology creation,
internet, network development and environmental. From 2000 to the present, Mr.
Roberts has acted as a high level consultant at various stages of development
representing venture capital firms funding various technology projects
throughout the United State and Europe. Mr. Roberts was chief technology officer
of VISI International, Inc., a company dealing with content display technologies
for airports, hospitals and banks from January 2000 to April 2002. Mr. Roberts
was business development officer for Resyk, Inc. a company dealing with
recycling initiatives for the European Union from April 2002 to May 2004. Since
April 2004, Mr. Roberts has been a technology consultant for a number of
different organizations and venture capital firms in the United States and
Europe.

Mr. Roberts presently devotes approximately 40 hours per week
of his business time to our business, representing substantially all of his
business time. During the third quarter of fiscal 2007, Mr. Roberts provided
approximately 40 hours per month performing tasks as a consultant with the
balance of his time being devoted to our business. This outsourcing work was
completed in the third quarter of fiscal 2007 and is not continuing.

30

---

Antonin Kral has been a director and our Chief Technical
Officer since February 7, 2006. He is responsible for the complete analysis of
ITonis video solution, including the design of network topology. He holds a
Masters degree from the Czech Technical University and is currently working on
his PhD in the Department of Mathematics, Faculty of Nuclear Sciences and
Physical Engineering. He has been involved in many projects including the
Deployment of IPv6 at Pragonet and was a member of the design team when
developing the network for DHL computing center. At the Czech Technical
University (CTU) he deployed IPv6 for the whole university and managed and
administrated the whole CTU campus network (Novel Netware, UNIX servers and 2500
workstations connected to the university backbone and Internet) as well as
computer clusters of CTU computer science department. Mr. Kral is a lector at
CTU (Computer science) on Computer networks and Textual information Systems. He
has also been a Member of the board of experts at the Ministry of Informatics 
Czech Republic since October 2004. Mr. Kral has also been involved in research
projects, including research on end-to-end performance and QoS at Cesnet (Czech
National Research and Education Network operator) and continues to be involved
in the COMPASS project as part of CERN (European Organization for Nuclear
Research).

Mr. Kral presently devotes approximately 20 hours per week of
his business time to our business, representing substantially all of his
business time.

Lawrence Haber has been our Senior Vice President,
General Counsel and Chief Administrative Officer since September 6, 2007 and our
Secretary since August 27, 2007. Mr. Haber is an attorney with experience in all
aspects of business and corporate legal representation. His experience includes
business formations, sales/mergers and acquisitions, and debt and equity
financing in industries as diverse as high-tech, sports, entertainment and
media. He is a graduate of the Hofstra University School of Law, Hempstead,
NY.

During his tenure at Walt Disney World from 1992 to 1999, Mr.
Haber was responsible for the business and legal affairs relating to television
programming for Walt Disney Attractions, including the negotiation, production
and distribution of Disney television programming. As a member of the corporate
law area, he performed sophisticated and complex legal transactions for a wide
range of Walt Disney World business areas, including information systems,
marketing, studios, corporate alliances, park operations, finance resorts,
sports, merchandising and purchasing.

While director of legal administration for Universal Studios
Florida from 1988 to 1991, he managed more than $150 million in contracts and
authored the companys policies and procedures. His business experience includes
managing the start-up and ongoing operations of onsite concessions employing
hundreds of staff members.

Mr. Haber has practiced as a private practice attorney from
1999 to present, during which time he specialized in intellectual property law
including trademark, trade name, and copyright issues. His practice areas also
include healthcare financing, multi-family housing financing, commercial lease
transactions, administrative law, and downtown redevelopment and enterprise zone
transactions. Additionally, Mr. Haber is experienced in municipal bond and
industrial development revenue issues. He most recently served in a major
private equity firm assisting in new business development acquisitions and
sports and entertainment legal advisement.

Mr. Haber presently devotes approximately 40 hours per week of
his business time to our business, representing substantially all of his
business time.

Iain Mackenzie Fidlin was appointed a director of our
company on October 23, 2007. Mr. Fidlin has 25 years of international business
and finance experience covering capital raising, corporate negotiations and
investor relations, including 20 years international banking experience in
credit risk analysis, relationship management and business orientation and
development in an international banking environment in Frankfurt, London, Hong
Kong and the Asia Pacific. From May 1982 to October 2002, Mr. Fidlin was with
Commerzbank AG in the Asia Pacific where he became Vice President, Regional Head
of Multinational Companies and managed key relationships and accounts with a
team of ten business development executives reporting to him. From November 2002
to January 2004, he was a director,

31

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stakeholder and corporate consultant at Augmentum Capital
Limited in Hong Kong where he was involved in a number of transactions including
a €100 million private placement for a German company, assisted a Hong Kong
company to sell pharmaceutical assets and was also involved in a US$50 million
metal recycling project. Since February 2004, Mr. Fidlin has acted as a
consultant to Greater China 2K4 Group Limited in Hong Kong where he functions as
an executive/managing director for various operating companies with businesses
in China, as well as assists with capital raising and investor relations and
acts as an official representative in China for food and beverage,
pharmaceutical/biotech and real estate companies.

Mr. Fidlin presently devotes approximately 15 hours per week of
his business time to our business as a consultant.

Term of Office

Our directors are appointed for a one-year term to hold office
until the next annual general meeting of our shareholders or until removed from
office in accordance with our bylaws. Our officers are appointed by our board of
directors and hold office until removed by the board.

Significant Employees

We currently do not have any significant employees other than
our executive officers.

Committees of the Board Of Directors

At present, we do not have an audit committee, compensation
committee, nominating committee, an executive committee of our board of
directors, stock plan committee or any other committee. In addition, none of our
directors are independent as defined in the listing standards of the American
Stock Exchange. However, we plan to seek suitable candidates for election as
directors, and establish various committees, during the current fiscal year.

Family Relationships

We do not currently anticipate electing or appointing as
directors or officers of our company any persons who are related to each other
or to our existing officers and directors.

Involvement in Certain Legal Proceedings

None of our directors, executive officers and control persons
have been involved in any of the following events during the past five
years:

|1. | any bankruptcy petition filed by or against any business
      of which such person was a general partner or executive officer either at
      the time of the bankruptcy or within two years prior to that
  time;                                                                                                            
|-- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                
|2. | any conviction in a criminal proceeding or being subject
      to a pending criminal proceeding (excluding traffic violations and other
      minor offences);                                                                                                                                                                 
|   |                                                                                                                                                                                                                                                                                                                                
|3. | being subject to any order, judgment, or decree, not
      subsequently reversed, suspended or vacated, of any court of competent
      jurisdiction, permanently or temporarily enjoining, barring, suspending or
      otherwise limiting his involvement in any type of business, securities or
      banking activities; or
|   |                                                                                                                                                                                                                                                                                                                                
|4. | being found by a court of competent jurisdiction (in a
      civil action), the Commission or the Commodity Futures Trading Commission
      to have violated a federal or state securities or commodities law, and the
      judgment or decision has not been reversed, suspended, or
  vacated.                             

32

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Compliance with Section 16(a) of the Securities Exchange Act
of 1934

Section 16(a) of the Exchange Act requires our executive
officers and directors, and persons who beneficially own more than ten percent
of the our equity securities, to file reports of ownership and changes in
ownership with the Securities and Exchange Commission. Officers, directors and
greater than ten percent shareholders are required by SEC regulation to furnish
us with copies of all Section 16(a) forms they file. Based on our review of the
copies of such forms received by us, we believe that during the fiscal year
ended November 30, 2007 all such filing requirements applicable to our officers
and directors were complied with except as noted below:

|Name and Principal                                                 | Number of Late | Transactions Not | Known Failures to
|------------------------------------------------------------------ | -------------- | ---------------- | -----------------
|Position                                                           | Reports        | Timely Reported  | File a Form      
|                                                                   |                |                  |                  
|Thomas N. Roberts, President, Chairman
      CEO, CFO and Director | One            | Nil              | Nil              
|                                                                   |                |                  |                  
|Antonin Kral Director and Chief
      Technical Officer            | Two            | Nil              | Nil              
|                                                                   |                |                  |                  
|Iain Mackenzie Fidlin Director                                     | One            | Nil              | Nil              

|ITEM 10. | EXECUTIVE COMPENSATION
|-------- | ----------------------

Summary Compensation Table

The following table sets forth certain compensation information
for the year ended November 30, 2007 for our Chief Executive Officer. None of
our executive officers earned more than $100,000 during the fiscal year ended
November 30, 2007.

|                                                         |           |            |         |         |         | Non-      | Non-      |         |           
|-------------------------------------------------------- | --------- | ---------- | ------- | ------- | ------- | --------- | --------- | ------- | ----------
|                                                         |           |            |         |         |         | Equity    | qualified |         |           
|                                                         |           |            |         |         |         | Incentive | Deferred  | All     |           
|                                                         |           |            |         |         |         | Plan      | Compen-   | Other   |           
|Name and                                                 |           |            |         | Stock   | Option  | Compen-   | sation    | Compen- |           
|Principal                                                |           | Salary     | Bonus   | Awards  | Awards  | sation    | Earnings  | sation  | Total     
|Position                                                 | Year      | ($)        | ($)     | ($)     | ($)     | ($)       | ($)       | ($)     | ($)       
|                                                         |           |            |         |         |         |           |           |         |           
|Nicolas Lavaud,
      Former Chief Executive Officer (1) | 2007 2006 | Nil 30,527 | Nil Nil | Nil Nil | Nil Nil | Nil Nil   | Nil Nil   | Nil Nil | Nil 30,527
|Thomas Neal Roberts, Chief
      Executive Officer (1)   | 2007      | 5,800      | Nil     | Nil     | Nil     | Nil       | Nil       | Nil     | 5,800     

|(1) | Mr. Lavaud was our Chief Executive Officer, Chief
      Financial Officer and a director from November 16, 2005 to July 2, 2007,
      when he was replaced by Mr. Roberts.
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------

33

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Employment Agreements

On January 2, 2008, we finalized and entered into an employment
agreement with Mr. Thomas Neal Roberts, our President, Chief Executive Officer
and Chief Financial Officer and a director of the Company, with respect to his
appointment as our Chief Executive Officer, and with Mr. Lawrence Haber with
respect to his employment as our Senior Vice-President, General Counsel and
Chief Administrative Officer. The employment agreements are dated as of January
1, 2008 (the Effective Date). We have also entered into an employment
agreement dated January 2, 2008 with Antonin Kral, our Chief Technical Officer,
with respect to his appointment as Chief Technical Officer. The following
summary of these employment agreements does not purport to be complete and is
qualified in its entirety by reference to each such agreement. Copies of the
employment agreements with Mr. Roberts, Mr. Haber and Mr. Kral are attached as
exhibits to this Annual Report.

Thomas Neal Roberts

Pursuant to the terms of his employment agreement, Mr. Roberts
will serve our Chief Executive Officer and as Chief Executive Officer of all of
our subsidiaries. Mr. Roberts will perform such duties and responsibilities as
our board of directors may from time to time reasonably determine and assign as
is customarily performed by persons in an executive position. A more detailed
description of Mr. Roberts job responsibilities is attached as Exhibit A to
the employment agreement. Mr. Roberts will report directly to our board of
directors. Mr. Roberts has agreed to devote, on an as-needed basis, all
necessary time, energy, knowledge, skill and reasonably best efforts to the
business of the Company, however, Mr. Roberts is permitted to have limited
involvement with outside business ventures which do not conflict with the
business of the Company. Mr. Roberts will be based in Beijing.

In consideration for Mr. Roberts services, we have agreed
to:

- pay Mr. Roberts a base salary in the amount of $300,000 per year, less
  applicable payroll deductions and tax withholdings, payable in accordance with
  the then-current payroll policies of the Company during Mr. Roberts employment
  period,
- issue to Mr. Roberts up to 25,000,000 shares of common stock of the Company
  in a combination of option grants and share grants, pursuant to separate stock
  and option grant agreements to be executed between Mr. Roberts and the Company
  within 30 days from the Effective Date. It is anticipated that the exercise of
  any stock options and the grant of any stock awards will be subject to vesting
  based on the achievement of specified milestones based on the Companys
  business plan. Negotiations regarding the stock and option grants and strike
  price are ongoing and are anticipated to be concluded by year end. We will
  file an additional Current Report on Form 8-K disclosing these agreements once
  they have been concluded.

In addition, we have agreed to reimburse Mr. Roberts for all
reasonable business expenses incurred by Mr. Roberts during the course of his
employment.

The term of Mr. Roberts employment shall commence from the
Effective Date through to the third anniversary of the Effective Date and may be
extended by mutual written agreement of the parties. We are entitled to
terminate the employment agreement for cause, as defined in the employment
agreement, which includes, without limitation, failure of Mr. Roberts to perform
his material duties or a material breach of the material terms of the agreement
by Mr. Roberts. We will be entitled to terminate the employment agreement
without cause at any time after the first year of the employment agreement. If
we terminate the employment agreement without cause or if Mr. Roberts terminates
the employment agreement for good reason, as defined in the employment
agreement, we will be obligated to pay to Mr. Roberts an amount equal to 90 days
base salary, in addition to unpaid or accrued salary and bonus payments to the
date of termination.

34

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Lawrence Haber

Pursuant to the terms of his employment agreement, Mr. Haber
will serve as our Senior Vice-President, General Counsel and Chief
Administrative Officer and as Senior Vice-President, General Counsel and Chief
Administrative Officer of all of our subsidiaries. Mr. Haber will perform such
duties and responsibilities as our Chief Executive Officer may from time to time
reasonably determine and assign as is customarily performed by persons in such
an executive position. A more detailed description of Mr. Habers job
responsibilities is attached as Exhibit A to the employment agreement. Mr.
Haber will report directly to our Chief Executive Officer. Mr. Haber has agreed
to devote, on an as-needed basis, all necessary time, energy, knowledge, skill
and reasonably best efforts to the business of the Company, however, Mr. Haber
is permitted to continue his law practice and limited involvement with outside
business ventures which do not conflict with the business of the Company. Mr.
Haber will be based in Florida.

In consideration for Mr. Habers services, we have agreed
to:

- pay Mr. Haber a base salary in the amount of $200,000 per year, less
  applicable payroll deductions and tax withholdings, payable in accordance with
  the then-current payroll policies of the Company during Mr. Haber employment
  period,
- issue to Mr. Haber up to 10,000,000 shares of common stock of the Company
  in a combination of option grants and share grants, pursuant to separate stock
  and option grant agreements to be executed between Mr. Haber and the Company
  within 30 days from the Effective Date. It is anticipated that the exercise of
  any stock options and the grant of any stock awards will be subject to vesting
  based on the achievement of specified milestones based on the Companys
  business plan. Negotiations regarding the stock and option grants and strike
  price are ongoing and are anticipated to be concluded by year end. We will
  file an additional Current Report on Form 8-K disclosing these agreements once
  they have been concluded.

In addition, we have agreed to reimburse Mr. Haber for all
reasonable business expenses incurred by Mr. Haber during the course of his
employment.

The term of Mr. Habers employment shall commence from the
Effective Date through to the third anniversary of the Effective Date and may be
extended by mutual written agreement of the parties. We are entitled to
terminate the employment agreement for cause, as defined in the employment
agreement, which includes, without limitation, failure of Mr. Haber to perform
his material duties or a material breach of the material terms of the agreement
by Mr. Haber. We will be entitled to terminate the employment agreement without
cause at any time after the first year of the employment agreement. If we
terminate the employment agreement without cause or if Mr. Haber terminates the
employment agreement for good reason, as defined in the employment agreement,
we will be obligated to pay to Mr. Haber an amount equal to 90 days base salary,
in addition to unpaid or accrued salary and bonus payments to the date of
termination.

Antonin Kral

Mr. Kral provided his services as Chief Technical Officer to us
under a contract between Mr. Kral and ITonis CZ dated January 1, 2006. This
contract expired November 30, 2007. No shares are issuable to Mr. Kral pursuant
to this employment contract. Mr. Kral has been granted options to purchase
360,000 shares of our common stock, as described below under Grants of Stock
Options.

Pursuant to the terms of his new employment agreement with the
Company, entered into as of January 2, 2008, a copy of which is filed with this
Annual Report. Mr. Kral will serve as our Senior Vice Predident and Chief
Technology Officer. Mr. Kral will perform such duties and responsibilities as
our Chief Executive Officer may from time to time reasonably determine and
assign as is customarily performed by persons in such an executive position. A
more detailed description of Mr. Krals job responsibilities is attached as
Exhibit A to the employment agreement. Mr. Kral will report directly to our
Chief Executive Officer. Mr. Kral has agreed to devote, on an as-needed basis,
all necessary time, energy, knowledge, skill

35

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and reasonable best efforts to the business of the Company,
however, Mr. Kral is permitted to work half time with outside business ventures
which do not conflict with the business of the Company. Mr. Kral will be based
in the Czech Republic.

In consideration for Mr. Krals services, we have agreed
to:

- pay Mr. Kral a base salary in the amount of $100,000 per year, less
  applicable payroll deductions and tax withholdings, payable in accordance with
  the then-current payroll policies of the Company during Mr. Krals employment
  period; and
- issue to Mr. Kral up to 6,500,000 shares of common stock of the Company in
  a combination of option grants and share grants, pursuant to separate stock
  and option grant agreements to be executed between Mr. Kral and the Company
  within 30 days from the effective date of his employment agreement. it is
  anticipated that the exercise of any stock options and the grant of any stock
  awards will be subject to vesting based on the achievement of specified
  milestones based on the Companys business plan. Negotiations regarding the
  stock and option grants and strike price are ongoing and are anticipated to be
  concluded by year end. We expect to file an additional Current Report on Form
  8-k disclosing these agreements once they have been concluded.

In addition, we have agreed to reimburse Mr. Kral for all
reasonable business expenses incurred by Mr. Kral during the course of his
employment.

The term of Mr. Krals employment shall commence from the
effective date of his employment agreement through to the third anniversary
thereof and may be extended by mutual written agreement of the parties. We are
entitled to terminate the employment agreement for cause, as defined in the
employment agreement, which includes, without limitation, failure of Mr. Kral to
perform his material duties or a material breach of the material terms of the
agreement by Mr. Kral. We will be entitled to terminate the employment agreement
without cause at any time after the first year of the employment agreement. If
we terminate the employment agreement without cause or if Mr. Kral terminates
the employment agreement for good reason, as defined in the employment
agreement, we will be obligated to pay to Mr. Kral an amount equal to 90 days
base salary, in addition to unpaid or accrued salary and bonus payments to the
date of termination.

2006 Stock Option Plan

Our board of directors has approved the Companys 2006 Stock
Option Plan (the 2006 Plan) as of June 16, 2006. The following summary of the
2006 Plan does not purport to be complete and is qualified in its entirety by
reference to the plan, a copy of which has been filed as an Exhibit to our
Amendment No. 1 to Form SB-2 filed with the SEC on June 27, 2006.

The 2006 Plan provides for the grant of options to purchase up
to 3,000,000 shares of our common stock to our directors, officers, employees,
and eligible consultants. Any shares of common stock that have been made subject
to an option that ceased to be subject to the option (other than by reason of
exercise or settlement of the option to the extent it is exercised for or
settled in shares) shall again be available for issuance in connection with
future grants of options under the plan. The plan is administered by our board
of directors or a committee appointed by, and consisting or two or more members
of, the board. Except for the terms and conditions explicitly set forth in the
2006 Plan, the plan administrator has the exclusive authority, in its
discretion, to determine all matters relating to options under the plan,
including the selection of individuals to be granted options, the type of
options, the number of shares of common stock subject to an option, all terms,
conditions, restrictions and limitations, if any, of an option and the terms of
any instrument that evidences the option. The plan administrator also has the
exclusive authority to interpret the plan and the terms of any instrument
evidencing the option and may from time to time adopt and change rules and
regulations of general application for the plans administration. The plan
administrators interpretation of the 2006 Plan and its rules and regulations,
and all actions taken and determinations made by the plan administrator is
conclusive and binding on all parties.

36

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Grants of Stock Options

During the year ended November 30, 2006, we granted options to
purchase an aggregate of 1,500,000 shares of common stock to certain employees
on June 16, 2006, including 360,000 options to Antonin Kral, a director and our
Chief Technical Officer, as detailed below. On December 29, 2006, we granted
options to purchase 450,000 shares of our common stock to Nicolas Lavaud, our
former Chief Executive Officer and a former director. All options are
exercisable at a price of $0.2667 per share for a term expiring June 16, 2009
and are subject to the vesting provisions set forth below. All options have been
granted pursuant to and are subject to our 2006 Stock Option Plan.

Name of
      Optionee
    Number of OptionsAntonin Kral,
      Director and Chief Technical Officer
    360,000Nicolas Lavaud,
      Former Director and Chief Executive Officer
    450,000


Each option will vest on the following dates (each a Vesting
Date):

Date of Vesting
    Percentage of Options VestedJune 1, 2007
    10%August 1, 2007
    10%October 1, 2007
    10%December 1, 2007
    10%February 1, 2008
    10%April 1, 2008
    10%June 1, 2008
    10%August 1, 2008
    10%October 1, 2008
    10%December 1, 2008
    10%


Outstanding Equity Awards as of November 30, 2007

The following table summarizes the outstanding equity awards as
of November 30, 2007 for each of our named executive officers:

|                                                        | Option Awards | Stock Awards 
|------------------------------------------------------- | ------------- | -------------
|                                                        |               |              
|                                                        |               |              
|                                                        |               |              
|                                                        |               |              
|                                                        |               |              
|                                                        |               |              
|                                                        |               |              
|                                                        |               |              
|                                                        |               |              
|                                                        |               |              
|                                                        | Number of     | Number of    
|                                                        | Securities    | Securities   
|                                                        | Underlying    | Underlying   
|                                                        | Unexercised   | Unexercised  
|                                                        | Options       | Options      
|                                                        | (#)           | (#)          
|Name                                                    | Exercisable   | Unexercisable
|                                                        |               |              
|Nicolas Lavaud, Former Chief
      Executive Officer(1) | Nil           | 450,000      

37

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|                                                   | Option Awards | Stock Awards 
|-------------------------------------------------- | ------------- | -------------
|                                                   |               |              
|                                                   |               |              
|                                                   |               |              
|                                                   |               |              
|                                                   |               |              
|                                                   |               |              
|                                                   |               |              
|                                                   |               |              
|                                                   |               |              
|                                                   |               |              
|                                                   | Number of     | Number of    
|                                                   | Securities    | Securities   
|                                                   | Underlying    | Underlying   
|                                                   | Unexercised   | Unexercised  
|                                                   | Options       | Options      
|                                                   | (#)           | (#)          
|Name                                               | Exercisable   | Unexercisable
|                                                   |               |              
|Thomas Neal Roberts, Chief
      Executive Officer | Nil           | Nil          
|                                                   |               |              
|Antonin Kral, Chief Technical
      Officer        | Nil           | 360,000      

|(1) | All of Mr. Lavauds 450,000 options have subsequently
      expired due to his retirement as a director and officer of our Company in
      fiscal 2008.
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------

Compensation of Directors

We do not currently pay our directors any fees or other
compensation for acting as directors. We have not paid any fees or other
compensation to any of our directors for acting as directors to date.

Long-term Incentive Plans

We do not have any long-term incentive plans in place.

|ITEM 11. | SECURITIES OWNERSHIP OF CERTAIN BENEFICIAL
      OWNERS AND  MANAGEMENT AND RELATED STOCKHOLDER
      MATTERS
|-------- | -------------------------------------------------------------------------------------------------------------

The following table sets forth certain information concerning
the number of shares of our common stock owned beneficially as of March 28, 2008
by: (i) each person (including any group) known to us to own more than five
percent (5%) of any class of our voting securities, (ii) each of our directors,
(iii) each of our officers and certain key employees, and (iv) our officers and
directors and certain key employees as a group. Each shareholder listed below
possesses sole voting and investment power with respect to the shares shown.

|Name and address                     | Number of Shares Beneficially |                       
|------------------------------------ | ----------------------------- | ----------------------
|of beneficial
      owner            | Owned(1)                      | Percentage of Class(2)
|                                     |                               |                       
|Directors and Officers:              |                               |                       
|                                     |                               |                       
|Thomas Neal Roberts Director and CEO | Nil(3)                        | Nil                   
|                                     |                               |                       
|Antonin Kral Director and CTO        | 5,550,000(4)                  | 4.4%                  

38

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|Name and address                                                                                                        | Number of Shares Beneficially |                       
|----------------------------------------------------------------------------------------------------------------------- | ----------------------------- | ----------------------
|of beneficial
      owner                                                                                               | Owned(1)                      | Percentage of Class(2)
|                                                                                                                        |                               |                       
|Directors and Officers:                                                                                                 |                               |                       
|                                                                                                                        |                               |                       
|Lawrence Haber Secretary                                                                                                | Nil(5)                        | Nil                   
|                                                                                                                        |                               |                       
|Iain Mackenzie Fidlin Director                                                                                          | Nil                           | Nil                   
|                                                                                                                        |                               |                       
|Directors and Officers as a group                                                                                       | 5,550,000                     | 4.4%                  
|                                                                                                                        |                               |                       
|Major Shareholders:                                                                                                     |                               |                       
|                                                                                                                        |                               |                       
|Onyx Trading Inc. 306 Victoria House
      Victoria, Mahe, Seychelles                                                   | 12,750,000 (6)                | 10.2%                 
|                                                                                                                        |                               |                       
|Nordic IPTV Company ApS (7)Asgaardsvej 10, Dk-1811 Frederiksberg C, Denmark                                             | 18,000,000                    | 14.4%                 
|                                                                                                                        |                               |                       
|iOcean Media Limited (8)Portcullis TrustNet Chambers P.O. Box 3444, Road Town Tortola,
      British Virgin Islands     | 16,138,370                    | 12.9%                 
|                                                                                                                        |                               |                       
|Burton Sperber and Charlene Sperber Living
      Trust DTD 12/17/1985 777 Figueroa Street Los Angeles,
      California | 25,000,000                    | 20.0%                 

|Notes:
|------
|(1)   
|(2)   
|(3)   
|(4)   
|(5)   
|(6)   
|(7)   
|(8)   
|(9)   

39

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Changes in Control

We are unaware of any contract, or other arrangement or
provision of our Articles or by-laws, the operation of which may at a subsequent
date result in a change of control of our company.

|ITEM 12. | CERTAIN RELATIONSHIPS AND RELATED
      TRANSACTIONS
|-------- | ----------------------------------------------------

Related Party Transactions

Except as disclosed below, there are no transactions, since the
beginning of our companys last fiscal year, or any currently proposed
transactions, in which our company was or is to be a participant where the
amount involved exceeds the lesser of $120,000 or one percent of the average of
our companys total assets at year-end for the last three completed fiscal years
and in which any related person had or will have a direct or indirect material
interest. Related party includes

| | (a) | any of our directors or officers;                                                                                                                                                                                                                     
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                                                       
| | (b) | any person proposed as a nominee for election as a
      director;                                                                                                                                                                                    
| |     |                                                                                                                                                                                                                                                       
| | (c) | any person who beneficially owns, directly or indirectly,
      shares carrying more than 10% of the voting rights attached to our
      outstanding shares of common stock; or                                                                       
| |     |                                                                                                                                                                                                                                                       
| | (d) | any child, stepchild, parent, stepparent, spouse,
      sibling, mother-in-law, father-in-law, son-in-law, daughter-in-law,
      brother-in-law, or sister-in-law of any of the foregoing persons who has
      the same house as any of such person.

On March 14, 2007 we issued 16,138,370 shares of our common
stock to iOcean Media Limited and Ian Fidlin in exchange for all of the issued
and outstanding shares of Aquos Media Limited. At the time of this transaction,
Iain Mackenzie Fidlin, presently a director of our company, was a director of
iOcean Media Limited.

As of November 30, 2007 we owe $43,815 to Nicolas Levaud, who
was a director and officer of the Company. We have made no payments of principal
or interest on this amount during the fiscal year ended November 30, 2007, and
the largest aggregate amount of principal outstanding during the fiscal year
ended November 30, 2007 was $43,815. As of March 25, 2008, the amount
outstanding was $43,815.

During the year ended November 30, 2007, we paid $10,000 in
legal fees to Lawrence Haber, a secretary of our Company. Mr. Haber performed
these services before he was appointed as secretary of our Company.

We have also entered into employment agreements with our
executive officers pursuant to which we have issued or agreed to issue options
to acquire shares of our common stock. See Executive Compensation Employment
Agreements for more information.

|ITEM 13. | EXHIBITS
|-------- | --------

Exhibit Number
    Description of Exhibit3.1
    Articles of Incorporation (1)3.2
    Certificate of Amendment to Articles of Incorporation
      (1)3.3
    By-Laws (1)


40

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Exhibit Number
      Description of Exhibit3.4
      Certificate of Change pursuant to NRS 78.209 effective March
        19, 2007 (2)10.1
      Flow TV Joint Cooperation Contract between the
        Company and Beijing Lushi (SDTV) Pilot Media Co., Ltd. Dated December
        14, 2008 (3)10.2
      Agreement For Purchase And Sale Of Ownership
        Interests between the Company and Niu Zhengping and Wu Jiping, individually
        dated January 15, 2008 (3)10.3
      Amended and Restated Share Purchase Agreement
        between the Company, iOcean Media Limited and Aquos Media Limited dated
        January 21, 2008 (3)10.4
      Employment Agreement between the Company and
        Thomas Neal Roberts dated January 2, 2008 (3)10.5
      Employment Agreement between the Company and
        Lawrence Haber dated January 2, 2008 (3)10.6
      Employment Agreement between ITonis Inc. and Antonin Kral dated
        January 1, 2006 (1)10.7
      2006
        Stock Option Plan (3)10.8
      Promissory Note issued by ITonis Inc. to Nicolas
        Lavaud in the amount of CZ 400,000Kc dated July 3, 2006 (4)10.9
      Subscription Agreement between ITonis Inc. and
        Spectrum Managers Ltd. dated December 12, 2006 (5)10.10
      Employment Agreement between the Company and
        Thomas Neal Roberts dated September 1, 2007 (6)10.11
      Employment Agreement between the Company and
        Lawrence Haber dated September 1, 2007 (6)10.12
      Voting Trust Agreement between ITonis Inc. and
        iOcean Media Limited dated October 23, 2007. (7)10.13
      Option Agreement between ITonis Inc. and iOcean
        Media Limited dated October 23, 2007. (7)10.14
      Code
        of Ethics (8)10.15
      Letter of Moores Rowland dated February 15, 2007
        (6)31.1
      Certification of Chief Executive
        Officer and Chief Financial Officer pursuant to Rule 13a-14(a) of the
        Exchange Act(9)32.1
      Certification of Chief Executive
        Officer and Chief Financial Officer pursuant to Rule 13a-14(b) of the
        Exchange Act and 18 U.S.C. Section 1350, as adopted pursuant to Section
        906 of the Sarbanes-Oxley Act of 2002(9)


|(1) | Filed as an exhibit to the registration statement on Form
      SB-2 filed with the SEC on May 12, 2006.                          
|--- | ----------------------------------------------------------------------------------------------------------------------------------
|(2) | Filed as an exhibit to our Current Report on Form 8-K
      filed with the SEC on March 20, 2007.                                 
|(3) | Filed as an exhibit to Amendment No. 1 to the
      registration statement on Form SB-2 filed with the SEC on June 27,
      2006.
|(4) | Filed as an exhibit to the current report on form 8-K
      filed with the SEC on February 12, 2008.                              
|(5) | Filed as an exhibit to our Current Report on Form 8-K
      filed with the SEC on December 15, 2006.                              
|(6) | Filed as an exhibit to our Current Report on Form 8-K
      filed with the SEC on February 23, 2007.                              

41

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|(7) | Filed as an exhibit to our Current Report on Form 8-K
        filed with the SEC on September 11, 2007.
|--- | -------------------------------------------------------------------------------------------------------
|(8) | Filed as an exhibit to our Current Report on Form 8-K
        filed with the SEC on October 29, 2007.  
|(9) | Filed Herewith                                                                                         

|ITEM 14. | PRINCIPAL ACCOUNTANT FEES AND SERVICES
|-------- | --------------------------------------

We engaged Danziger Hochman Partners LLP, Chartered
Accountants, as our independent auditors effective February 9, 2007. Staley ,
Okada & Partners, Chartered Accountants served as our auditors until their
resignation on December 5, 2006. Following this resignation, Moores Rowland
Audit s.r.o., Chartered Accountants, served as our independent auditors from
January 22, 2007 up to the appointment of Danziger Hochman Partners LLP. For
more information on our changes in our auditors, see Item 8. Changes in and
Disagreements with Accountants on Accounting and Financial Disclosure. The
following table provides information relating to the fees we paid to our
independent auditors for the periods indicated:

|                   | Fiscal Year Ended | Fiscal Year Ended
|------------------ | ----------------- | -----------------
|                   | November 30, 2007 | November 30, 2006
|Audit Fees         | $82,950           | $44,793          
|Audit-related Fees | Nil               | Nil              
|Tax Fees           | Nil               | Nil              
|All other Fees     | Nil               | Nil              

Audit fees are the aggregate fees billed by our independent
auditors for the audit of our annual financial statements, reviews of interim
financial statements and attestation services that are provided in connection
with statutory and regulatory filings or engagements.

Audited-related fees are the aggregate fees billed by our
independent auditors for assurance and related services that are reasonably
related to the performance of the audit or review of our financial statements
and are not reported in the preceding paragraph.

Our policy is to pre-approve all audit and permissible
non-audit services performed by the independent accountants. These services may
include audit services, audit-related services, tax services and other services.
Under our audit committees policy, pre-approval is generally provided for
particular services or categories of services, including planned services,
project based services and routine consultations. In addition, we may also
pre-approve particular services on a case-by-case basis. We approved all
services that our independent accountants provided to us in the past two fiscal
years.

42

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SIGNATURES

In accordance with Section 13 or 15(d) of the Exchange Act, the
registrant caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.

| | ITONIS INC.                                               
| | ----------------------------------------------------------
| |                                                           
| |                                                           
| |                                                           
| | By:
      /s/ Thomas N. Roberts                           
| | Thomas N. Roberts                                         
| | Chief Executive Officer, Chief Financial
      Officer and
| | principal accounting officer                              
| | Date: April 3, 2008                                       

In accordance with the Securities Exchange Act, this report has
been signed below by the following persons on behalf of the registrant and in
the capacities and on the dates indicated.

|Signature             | Title                                       | Date         
|--------------------- | ------------------------------------------- | -------------
|                      |                                             |              
|/s/ Thomas N. Roberts | Chairman, President, Chief Executive        |              
|Thomas N. Roberts     | Officer, Chief Financial Officer, Principal | April 3, 2008
|                      | Accounting Officer and Director             |              
|                      |                                             |              
|                      |                                             |              
|/s/ Antonin Kral      | Chief Technical Officer and Director        | April 3, 2008
|Antonin Kral          |                                             |              
|                      |                                             |              
|                      |                                             |              
|/s/ Iain M. Fidlin    | Member of the Board of Directors            | April 3, 2008
|Iain M. Fidlin        |                                             |              

---