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

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

All references herein to the “Company,” “we,” “us” or “our” refers to China Broadband, Inc., its wholly owned subsidiary in the Cayman Islands, China Broadband Cayman, Ltd., and Beijing China Broadband Network Technology, a wholly foreign owned entity formed under the lawsdate of the ~~PRC, which is commonly referred to herein as our Wholly Foreign Owned Entity “WFOE”.~~

~~References in this Annual Report to the “PRC” or “China” are to the People’s Republic of China.~~

Investments in China based businesses involve a significant degree of regulatory risk in that the ownership of private enterprises in China is heavily regulated and subject to changing rules and regulations that could prevent us from recognizing revenues in our intended manner or from operating or controlling businesses in China. This is especially so in the media businesses in which we operate. The PRC government also has the right to de-privatize our current or future business.

You should consider these factors and the other cautionary statements or risk factors made in this Annual Report and in the documents we incorporate by reference as being applicable to all related forward-looking statements wherever they appear in this Annual Report and in any documents incorporated by reference. We do not assume any obligation to update any such forward-looking statements.

Original Filing.

We operate media businesses in the PRC through a holding company structure. In 2007 we acquired a cable broadband business (Jinan Broadband) based in the Jinan region of China and, prior to such time, we were a blank check shell company. In 2008, we acquired a 50% interest in a joint venture that operates a newspaper and periodical television programming guide business (Shandong Media) in the Shandong region of China. Most recently, in April of 2009 we acquired an internet café advertising and content provider business (AdNet). These three businesses are described in more detail below.

Pursuant to a Cooperation Agreement (the “Cooperation Agreement”) entered into in 2007 with Jinan Guangdian Jiahe Digital Television Co., Ltd. (“Jinan Parent”), we acquired and currently own, a 51% controlling interest in an operating broadband cable internet company based in the City of Jinan in the Shandong Region of China, an entity sometimes referred to herein as “Jinan Broadband.” The Cooperation Agreement provides that the operating business’ operations and pre-tax revenues would be assigned to our Jinan Broadband subsidiary for 20 years, effectively providing for an acquisition of the business. In consideration for this 20 year business and management rights license, we paid approximately $2,572,000, including expenses in March 2007 and the remaining approximate $3.2 million (based on 23 million RMB) in March of 2008. While this acquisition was completed in late March of 2007 with an effective transfer of assets date of April 1, 2007, we commenced certain operational oversight of this entity prior to such time.

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

Under the terms of the Shandong Newspaper Cooperation Agreement and related pledge and trust documents, the Shandong Newspaper entities mentioned above contributed their entire Shandong Newspaper Business and transferred certain employees, to Shandong Media in exchange for a 50% stake in Shandong Media, with the other 50% of Shandong Media to be owned by our WFOE in the PRC in the second quarter of 2008 with the joint venture becoming operational in July of 2008. In exchange therefore, the Cooperation Agreement provided for total initial consideration from us of approximately $1.5 million (approximately 10 million RMB) which was contributed to Shandong Media as working and acquisition capital. As part of the transaction, and to facilitate our subsidiary’s ownership and control over Shandong Newspaper under PRC law, through our WFOE in the PRC, we loaned Shandong Media said funds pursuant to a loan agreement and equity option agreement, and a majority of the shares of Shandong Newspaper are held on our behalf by Pu Yue, our CFO, as trustee on behalf of the Company pursuant to a pledge agreement and trustee agreement. The results of the Shandong Newspaper Business have been consolidated with the Company’s consolidated financial statements as of July 1, 2008.

In addition to the initial purchase price of $1.5 million (10 million RMB), the Shandong Newspaper Cooperation Agreement provides for additional consideration of approximately US $730,000 (as adjusted for current rates as of March 2009) and US $2,900,000 (between 5 million RMB and 20 million RMB, respectively) to be paid as a capital contribution to Shandong Media in the event that certain performance thresholds are met during the first 12 months of operations after closing the transaction.

~~Specifically, in the event that audited annual net profits during the first fiscal year (i.e. calendar 2009) after closing of the transaction relating to the Shandong Newspaper Cooperation Agreement:~~

In order to facilitate the transfer of equitable ownership and control of Shandong Media, this acquisition was completed in accordance with a pledge and loan agreement, pursuant to which all of the shares of Shandong Media which we acquired are held in trust on our behalf by Pu Yue, our CFO as nominee holder, as security for a loan to Shandong Media’s parent seller. See below in the “Management Discussion and Analysis of Financial Condition and Results of Operations” section, for more information about the individual publications.

Effective as of April 7, 2009, we entered into a letter of intent to acquire Wanshi Wangjing Media Technologies (Beijing) Co., Ltd., (a/k/a AdNet Media Technologies (Beijing) Co., Ltd.) (herein referred to as “AdNet”), whose primary business is the delivery of multimedia advertising content to internet cafés in the PRC. Pursuant to the terms of this acquisition, and, among other things, we issued 11,254,898 shares of our Common Stock to AdNet’s shareholders in exchange for 100% of AdNet’s equity ownership and $100,000 paid to us (the “AdNet Acquisition”). As part of the terms of the AdNet Acquisition, and to facilitate our subsidiary’s ownership and control over AdNet under PRC law, we loaned AdNet $100,000 pursuant to a Loan Agreement and Equity Option Agreement, and all of the shares of AdNet are held by a trustee appointed by the Company to act as directed by the Company.

~~AdNet holds an Internet Content Provider (“ICP~~”) license and is in the business of providing delivery of multimedia advertising content to internet cafés in China. AdNet currently services over 2,000 cafés with plans to increase its presence by year end and currently operates and is licensed to operate in 28 provinces in the PRC with servers in five data centers including Wuhan, Wenzhou, Yantai, Yunan and with a master distribution server in Tongshan. Partnering with a local advertisement agency, AdNet provides a network for tens of thousands of daily video advertisement insertions to entertainment content traffic (movies, music, video, and games).

No assurance can be made that the combined companies will be successful or will have sufficient capital to grow. The foregoing description is a summary only of the AdNet Agreement and is qualified in its entirety by reference to the full AdNet Agreement filed as an exhibit to this report.

We have an offshore holding structure commonly used by non-Chinese investors that acquire operations in China and make foreign investments of equity, since Chinese regulations do not readily permit foreign ownership of certain mainland Chinese businesses such as telecommunications or cable and related value-added services. Our wholly owned subsidiary after the Broadband Acquisition, China Broadband Cayman, owns 100% of our wholly foreign owned entity, or “WFOE”, Beijing China Broadband Network Technology Co., Ltd., a Beijing, China corporation.

Pursuant to the Jinan Broadband Cooperation Agreement and Shandong Newspaper Cooperation Agreement, respectively, our WFOE in owns 51% of Jinan Broadband and 50% of the Shandong Media joint venture and controls both entities.

Jinan Broadband’s other 49% owners are Jinan Guangdian Jia He Digital Television Co., Ltd. (“Jinan Parent”) and certain of its affiliates. Shandong Media’s other 50% is owned by and among, Shandong Broadcast & TV Weekly Press and Modern Movie and TV Biweekly Press, each PRC companies (collectively “Shandong Newspaper”).

Through the Exclusive Cooperation Agreements and one or more similar operating agreements among the respective parties, we manage and control the operations of Jinan Broadband and Shandong Newspaper subject to certain oversight provisions, and receive the economic benefits derived from their operations.

The shares of Shandong Newspaper issued to our WFOE in 2008 and of AdNet issued to China Broadband Cayman in April of 2009 are held in trust pursuant to loan and pledge agreements securing loans made to facilitate such transactions, and transferring full control over such entities. Jinan Broadband, our cable business, is 51% owned by our WFOE and 49% owned by a subsidiary of Jinan Parent.

~~About Our Jinan Broadband Business~~

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

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

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

In addition, the Shandong Newspaper entities entered into an Exclusive Advertising Agency Agreement and an Exclusive Consulting Services Agreement with Shandong Media which requires that the Shandong Newspaper entities shall appoint Shandong Media as its exclusive advertising agent and provider of technical and management support for a fee.

No assurance can be made for an increase in revenues and in turning Shandong Newspaper profitable will be successful or we will raise the additional capital necessary to make the second payment. Our plans and intentions are regularly subject to change, risks and other uncertainties as outlined herein and in our “Forward Looking Statements” above and “Risk Factors” below.

~~In addition to being the exclusive provincial television programming guide publishing group in Shandong province, Shandong Media has:~~

~~TV Weekly Magazine.~~ TV Weekly Magazine is a national PRC magazine title, ranked among China’s top 5 TV Guide & general entertainment magazines. Published on a weekly basis, this magazine’s average circulation is 40,000 copies in Shandong region. The unique national publishing title encourages TV Weekly to expand it’s target market to neighboring regions in northern China.

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

~~Jinan Broadband~~

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

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

~~Shandong Newspaper~~

~~AdNet~~

Our recently acquired (April 2009) AdNet division, which operates an internet café advertising and content provider business, holds an Internet Content Provider license (“ICP”) issued by the Ministry of Commerce of the PRC. AdNet is authorized to operate and provide content and advertising throughout the PRC.

~~Focus on Shandong Region~~

The Shandong province has a population of approximately 92 million people with the second highest gross domestic product (“GDP”) ranking in China. The Shandong province is served by 17 municipal cable television operators, including Jinan Parent, the cable operator of Jinan and affiliate of Jinan Broadband. Jinan with a population of 5.9 million is the capital city of the Shandong Province. The foregoing population and GDP statistics are provided by Jinan Municipal Government and can be viewed at (~~www.jinan.gov.cn~~ ).

The Shandong Newspaper division is also located in Jinan in the Shandong Province. Currently its primary distribution is in the Shandong province with approximately 250,000 subscribers. We continue to believe that the Shandong regional market provides a potential opportunity for expanding our current and future media services. We intend to develop and evolve our market strategy on an ongoing basis based on our results in the Shandong region.

~~Bundle with Direct TV Rollout~~

We believe that Chinese cable companies are exerting efforts to digitalize cable networks which we believe will increase the use and availability of digital STB (Set-top-box) in Shandong province. By 2015, the PRC’s State Administration of Radio, Film, and Television (“SARFT”) intends for the entire country to deploy digital cable television and cease providing analog television transmission services. This will require the conversion of current “analog” cable customers into “digital” or pay television cable subscribers. Analog cable customers currently pay on average $1.50 per month for cable television service. Digital cable customers with STB are projected to pay $3.50 per month, as a basic fee. We hope to capitalize on the digitalization campaign initiated by SARFT by bundling cable broadband services in the digital STB rollout campaign.

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

~~Deployment of Value-added Services~~

To augment our product offerings and create other revenue sources, we work with strategic partners to deploy value-added services to our cable broadband customers. Value-added services, including but not limited to the synergies created by the additions of our new assets, will become a focus of revenue generation for our company.

Management believes that its recent acquisition of AdNet in April of 2009, can further provide a branding vehicle and value added service in the broadband sector. AdNet delivers multimedia advertising content to internet cafes in China. AdNet currently operates in 29 provinces within China with servers in five data centers including Wuhan, Wenzhou, Yantai, Yunan, with a master distribution server in Tongshan. AdNet provides a network for daily video ad insertions to entertainment content traffic (movies, music, video, and games). In addition, AdNet’s management team has experience with value added services for media companies and will focus on this area for both existing broadband assets.

~~No assurance can be made that we will add other value-added services, or if added, that they will succeed.~~

As of December 31, 2008, Jinan Broadband has approximately 58,000 cable internet subscribers. Shandong Newspaper has, in aggregate amongst its various titles, a reader base of approximately 250,000 persons. All of our customers are in the PRC.

~~Jinan Broadband Competition~~

We believe that local telecom carriers that offer non-cable internet services, such as DSL, represent our primary competition in the PRC. An example is China Netcom, a telecom carrier in the Shandong province of China.

Local telecom carriers are actively marketing broadband services on national, provincial, as well as local levels in China. Telecom carriers own “last mile access” to urban households in the form of fixed phone lines. we believe that cable operators have a competitive advantage by owning last mile connections in the form of cable lines that have a larger bandwidth relative to phone lines. In urban areas that we target, a large number of households have both fixed phone line and cable television access. Many of these homes currently have telecom based internet access.

Cable operators in China must purchase internet connection bandwidth from the local telecom carriers. Since the local telecom carriers are not required to pay for internet connection bandwidth, which increases their profit margins relative to cable broadband service providers. This affords them a potential price advantage, but to date their prices remain in line with our prices.

We believe, however, that the ability for cable operators to bundle cable broadband with digital Set-top boxes combined with the quality and versatility of cable based broadband services, provides a competitive advantage. For example, voice over internet protocol telephony service (known as “VOIP”) can be provided over cable lines with limited added costs to us or the end user. We do not have plans to provide value added services such as VOIP to our customers in the near future. Instead, we plan to pursue expansion opportunities by increasing the number of geographical regions in which we are licensed to operate.

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

~~Industry Structure and Government Regulation~~

There are various barriers to entry into the cable or internet service provider, or print media businesses in China. These barriers stem from both industry barriers and government regulation. Cable operators in China, including Jinan Broadband, face many challenges as the marketplace evolves. The rates we charge and services we provide to cable customers are subject to government regulation and approval. In addition, print media is subject to government regulation and censorship.

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

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

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

Our business is highly regulated. We are required to obtain government approval from the Ministry of Commerce of the People’s Republic of China, commonly referred to as MOFCOM, and other government agencies in China that approve transactions such as our acquisition of Jinan Broadband. Additionally, foreign ownership of business and assets in China is not permitted without specific government approval. For this reason, we acquired only 51% of Jinan Broadband, with the remaining 49% owned by Jinan Parent and its affiliates. Similarly, Shandong Newspaper was acquired through a partly owned joint venture and AdNet and Shandong Newspaper were both acquired under a trustee relationship. We use revenue sharing and voting control agreements among the parties so as to obtain equitable and legal ownership of our subsidiaries.

Until 2005, there were over 2,000 independent cable operators in the PRC. While SARFT has advocated for national consolidation of cable networks, the consolidation has primarily occured at the provincial level. The 30 provinces are highly variable in their consolidation efforts and processes. Many cable operators in China, on a stand-alone basis, may lack the economies of scale to systematically introduce value-added services that can significantly upgrade ARPU. (See SARFT website, above).

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

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

We believe that SARFT and its broadcasters are currently focusing on increasing subscription revenues by converting Chinese television viewers from “analog” service to “digital” (pay TV) service. The digitalization efforts include providing set-top-boxes free of charge as part of a digital television service bundling initiative. Due to the lack of financial resources, the rollout of cable broadband services and other value-added services is moved lower on the SARFT priority list.

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

As of December 31, 2008, Jinan Broadband had a total of 68 employees, which include 20 in sales and marketing, 38 in technical staff and 10 in management, financial and administration. In addition, we have two full time employees in the United States. In addition, the Shandong Newspaper Division employs a total of 89 employees.

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

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

~~Dilutive effects of issuing additional common stock~~.

~~Item 2. Properties.~~

~~Item 3. Legal Proceedings.~~

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

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

Effective as of October 16, 2007, the symbol for our common stock was changed to “CBBD” to reflect our name change to China Broadband, Inc. Prior to such time the symbol for our common stock was “APNA”. Up until December 20, 2007, we were trading on the Pink Sheets and the letters “.PK” were added to the end of our four letter identifier. Beginning December 21, 2007 we began trading on the OTC Bulletin Board and the letters “.OB” (CBBD.OB) are added to the end of our four letter identifier. Trading in the common stock has been limited and sporadic due to the limited market following and limited number of free trading shares, limited market following and general market illiquidity resulting from the economic downturn. The quotations set forth below are not necessarily indicative of actual market conditions. Further, these prices reflect inter-dealer prices without retail mark-up, mark-down, or commission, and may not necessarily reflect actual transactions. As of March 20, 2009 the closing price for our common stock as quoted on the OTC Bulletin Board was $0.15.

As of March 20, 2009 there were 307 record holders of our common stock and 50,585,455 shares of common stock issued and outstanding. Effective as of April 7, 2009, as a result of our completion of the acquisition of AdNet, an additional 11,254,898 shares have been authorized for issuance to 10 shareholders. The transfer agent of our common stock is Transfer Online, Inc.

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

Shares eligible for future sale could depress the price of our common stock, thus lowering the value of a buyer’s investment. Sales of substantial amounts of common stock, or the perception that such sales could occur, could adversely affect prevailing market prices for shares of our common stock.

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

We own and operate, through our indirect subsidiaries in the People’s Republic of China (“PRC”), a cable broadband business based in the Jinan region of China (Jinan Broadband) and a television programming guide publication business joint venture (Shandong Media) in the Shandong Province of China (see Item 1 above). More recently, we acquired an internet café content provider and advertising business in the PRC (AdNet) (See “Recent Developments” in Item 1 above). Our principal activity is providing cable and wireless broadband and print based media and television programming guide services. We operate in the media segment. All references to dollar amounts herein which relate to operations or revenues from the PRC are converted to reflect RMB exchange rates to the US dollar.

On January 11, 2008, the Company entered into a Settlement Agreement (the “Settlement Agreement”) by and among the Company and its subsidiaries, Stephen P. Cherner, Maxim Financial Corporation, Mark L. Baum, BCGU, LLC, Mark I. Lev, Wellfleet Partners, Inc., Pu Yue, Clive Ng, Chardan Capital Markets, LLC (“Chardan Capital”), Jaguar Acquisition Corporation (“Jaguar”), and China Cablecom Holdings, Ltd (“Cablecom Holdings”), pursuant to which the parties released certain potential claims against one another, as more fully set forth in Item 1 above.

On January 11, 2008, simultaneously with the entry into the Settlement Agreement, we entered into and consummated a subscription agreement (the “Subscription Agreement”) with ten accredited investors (inclusive of Chardan Capital) with respect to the issuance of an aggregate of $4,971,250 principal amount of convertible notes (“Notes”) due January 11, 2013, and Class A Warrants to purchase an aggregate of 6,628,333 shares of common stock of the Company at $.60 per share expiring on June 11, 2013 (the “January 2008 Financing”).

~~In 2008 the Company incurred $247,000 in interest expense related to the Notes. With the consent of the Note holders, the Company issued 329,856 shares to the Note holders in lieu of cash.~~

~~The following discussion and analysis should be read in conjunction with our audited financial statements and related notes included~~

Revenues for fiscal year ended 2008 were $6,362,000 as compared to $2,839,000 for 2007. The increase in revenue of approximately $3,523,000 or 124% is attributable to our Shandong Media joint venture entered into during 2008 that provided us with approximately $1,644,000 of revenues during the last two quarters of the year, and the inclusion of our Jinan Broadband operations for a full year in the 2008 period as compared to only nine months of operations in the 2007 period

Our revenues were attributed to our PRC based subsidiaries in 2008. Jinan Broadband revenue consisted of sales to our PRC based Internet consumers, cable modem consumers, business customers and other internet and cable services of $4,718,000. Shandong Media’s revenue consisted of sales to publications and advertising of $1,644,000.

We expect that our revenues will increase as we continue to grow our businesses. In addition, we expect in increase in gross revenues as a result of our recent acquisition of AdNet which, at the time of acquisition, operates in over 2,000 internet cafés.

Our gross profit in 2008 was $2,622,000, marking an increase from $1,181,000 in 2007. The increase in gross profit of approximately $1,141,000 or 122% is attributable to our Shandong Media joint venture and the inclusion of our Jinan Broadband operations for a full year in the 2008 period as compared to only nine months of operations in the 2007 period.

~~Gross profit as a percentage of revenue was 41.2% for 2008 as compared to 41.6% for 2007~~.

Our selling, general and administrative expenses in 2008 totaled $1,923,000 as compared to $954,000 in 2007. The increase in selling, general and administrative expenses of $969,000 or 102% is primarily attributable to our Shandong Media joint venture entered into during 2008 and the inclusion of our Jinan Broadband operations for a full year in the 2008 period as compared to only nine months of operations in the 2007 period.

During 2008 salaries and personnel costs of approximately $1,207,000 or 57% is the major component of selling, general and administrative expenses. During 2007 salaries and personnel costs were approximately $451,000 or 47%.

~~We expect our selling, general and administrative expenses will increase as we continue to grow our business.~~

~~The following contains a list of our professional fees incurred during 2008 and 2007.~~

The professional fees are generally related to public company reporting and governance expenses, and the Broadband Acquisition in 2007. In 2008 significant additional costs were incurred primarily for services performed relating to the Settlement Agreement and related transactions, the January 2008 note financing and the Shandong Media joint venture.

We expect our costs for professional services to remain significant, but to decrease as a percentage of our overall revenues as we continue to acquire new entities and create synergistic partnerships as we implement our strategy as set forth above for public company reporting and corporate governance expenses.

The increase in depreciation expenses of $1,082,000 is primarily attributable to our inclusion of Jinan Broadband operations for a full year in the 2008 period as compared to only nine months of consolidated operations in the 2007 period. Depreciation expense during 2008 relates to the depreciation on the approximately $13.7 million of property, plant and equipment, at our Jinan Broadband subsidiary.

The increase in amortization of $160,000 is attributable to (1) a full year in 2008 of our Jinan Broadband service contract amortization compared to only nine months in 2007, (2) amortization related to our Shandong Media intangible asset acquired in 2008 and (3) the amortization of debt issuance costs associated with the Convertible Note in 2008.

~~We recorded a net loss amount of approximately $912,000, in interest and other income (expense), net, during 2008. This amount consisted primarily of:~~

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

49% of the operating loss of our Jinan Broadband subsidiary is allocated to Jinan Parent, the 49% co-owner of this business. During 2008, $588,000 of our operating losses were allocated to Jinan Parent and $440,000 was allocated in 2007.

50% of the operating loss of our Shandong Media joint venture is allocated to our 50% Shandong Newspaper joint venture partner. We consolidated the results of Shandong Media effective July 1, 2008. During 2008 $22,000 (for 6 months of operations) of our operating loss from Shandong Media was allocated to Shandong Newspaper.

   Year Ended Year Ended
December 31, 2008 December 31, 2007
% of % of
Total Total
Operating Revenue Non-Operating Total Operating Revenue Non-Operating Total

Revenue $ 6,361,970 $ - $ 6,361,970 $ 2,839,197 $ - $ 2,839,197
Cost of revenue 3,740,381 - 3,740,381 1,657,979 - 1,657,979
Gross profit 2,621,589 41.2 % - 2,621,589 1,181,218 41.6 % - 1,181,218

Selling, general and adminstrative expenses 1,100,667 17.3 % 822,719 1,923,386 367,837 13.0 % 586,545 954,382
Professional fees 24,808 0.4 % 594,597 619,405 - 0.0 % 628,490 628,490
Depreciation and amortization 2,800,815 44.0 % 236,384 3,037,199 1,718,277 60.5 % 77,226 1,795,503

Income / (loss) from operations (1,304,701 ) -20.5 % (1,653,700 ) (2,958,401 ) (904,896 ) -31.9 % (1,292,261 ) (2,197,157 )
Interest & other income / (expense)
   Settlement gain
- 1,300,692 1,300,692 - - -
   Interest income / (expense), net
24,218 (326,988 ) (302,770 ) 8,441 (2,006 ) 6,435
   Gain (loss) on sale of securities
- (102,505 ) (102,505 ) - - -
   Loss on securities write-down
- (1,797,378 ) (1,797,378 ) - - -
   Other
(122 ) (10,014 ) (10,136 ) (936 ) (410,053 ) (410,989 )

Income / (loss) before minority interest (1,280,605 ) (2,589,893 ) (3,870,498 ) (897,391 ) (1,704,320 ) (2,601,711 )

Minority interest loss in operating subsidiaries - 609,630 609,630 - 439,722 439,722

Income / (loss) before income tax (1,280,605 ) -20.1 % (1,980,263 ) (3,260,868 ) -897,391 -31.6 % -1,264,598 -2,161,989

Income tax benefit / (expense) - 0.0 % (93,997 ) (93,997 ) - 147,955 147,955

Net income / (loss) $ (1,280,605 ) -20.1 % $ (2,074,260 ) $ (3,354,865 ) $ (897,391 ) -31.6 % $ (1,116,643 ) $ (2,014,034 )

As of December 31, 2008 we had $4,426,000 of cash on hand and a working capital deficit of $675,000. As of December 31, 2008, we had total current liabilities of $6,569,000. Given our current commitments and working capital deficit, we cannot support our operations for the next 12 months without additional capital.

During 2008 the Company incurred $345,000 in interest expense related to these notes. Based on a predetermined presumed value of $.75 per share as set forth in the Subscription Agreement and related documents with the consent of the Note holders, the Company issued 329,856 shares to the Note holders in lieu of cash of approximately $247,000 for interest accrued in 2008. Additional interest expense of $98,000 was recorded for the warrants.

In March 2008, we used approximately $3.2 million of these proceeds to fund our second payment for our purchase of Jinan Broadband. In addition, in 2008 we used approximately $1.4 million to fund our initial investment in our Shandong Media joint venture

In April 2008 we received 390,000 Cablecom Holdings Shares that were part of the Settlement Agreement described above and recorded, as a portion of the settlement gain, $2,515,000 upon receipt of the shares. During 2008 the Company sold 71,880 of the Cablecom Holdings Shares on the open market and received gross proceeds of $361,000 and recorded a net loss on the sales of approximately $103,000.

As a result of a significant decline in the price of the Cablecom Holdings Shares we recorded an other than temporary impairment loss of approximately $1.8 million on these shares in interest and other income (expense) in 2008. The fair value of the remaining 236,806 Cablecom shares at March 20, 2009 approximates $69,000.

Years Ended
December 31, December 31,
2008 2007
Net cash provided by (used in) operating activities $ 1,432,000 $ 1,129,000
Net cash provided by (used in) investing activities (1,700,000 ) (2,443,000 )
Net cash provided by (used in) financing activities 4,232,000 1,351,000
Effect of exchange rate changes on cash (11,000 ) 332,000

Operating activities for 2008 and 2007, after adding back non-cash items, provided cash of approximately $448,000 and $72,000, respectively. During such period other changes in working capital provided cash of approximately $983,000 and $1,057,000, respectively, resulting in cash being provided by operating activities of $1,432,000 and $1,129,000, respectively.

Investing activities for 2008 and 2007 used cash of $1,700,000 and $2,443,000, respectively. The 2008 amounts consisted of additions to property and equipment in the amount of $2,061,000 offset by the proceeds from the sale of Cablecom Holding shares in the amount of $361,000. The 2007 amounts consisted solely of additions to property and equipment.

Financing activities for 2008 and 2007 provided cash of $4,232,000 and $1,351,000, respectively. For 2008, this amount consisted of proceeds from the issuance of convertible notes of $4,850,000 partially offset by $105,000 of payments related to issuance costs associated with the convertible notes and an increase in the payable to Jinan Parent in the amount of $513,000. For 2007, this amount consisted of proceeds from the private placement of $4,000,000 partially offset by $421,000 of payments related to issuance costs associated with the private placement offering and a decrease in the payable to Jinan Parent in the amount of $2,228,000.

Our WOFE, Jinan Broadband subsidiary and Shandong Media joint venture are located in China. All of their operations are conducted in the local currency of the Chinese Yuan also known as Renminbi or RMB. The effect of exchange rates on cash between the Chinese Yuan and the United States dollar, provided (used) cash of $(11,000) and $332,000 during 2008 and 2007, respectively.

We have raised approximately $4.8 million (net of cost of capital and expenses) in order to fund our second payment for our purchase of Jinan Broadband, which payment was due in January of 2008 and to acquire Shandong Newspaper and cover the cost of interim operations. We made the second and last payment for Jinan Broadband in March of 2008 and incurred no penalty for making this payment in March.

In 2008 we used approximately $1.4 million to fund our first payment under the Shandong Newspaper Cooperation Agreement to Shandong Media. Management will need to raise additional funds to satisfy the second payment to Shandong Media in October 2009 (see below).

Management does not believe that the Company has sufficient capital to sustain its operations without raising additional capital. Pursuant to the Settlement Agreement, we received 390,000 shares of Cablecom Holdings Shares from Mr. Ng, in April 2008of which 260,000 are subject to lock-up provisions that expire within the next 12 months. In 2008 the Company sold 71,880 of the Cablecom Holdings Shares on the open market and received gross proceeds of $361,000. In 2008 the value of the Cablecom Holding Shares decreased approximately $1.8 million resulting in a value for these shares of approximately $254,000 at December 31, 2008. The Cablecom Holding Shares may continue to fluctuate and may decline further. In January and February of 2009 an additional 81,314 shares were sold for total proceeds of $52,736.

We intend to grow primarily through marketing to increase our subscriber (Jinan Broadband) and readership (Shandong Media) base and through acquisitions and partnerships of China based broadband, internet and media businesses. The synergistic relationships and economies of scale will also expand our growth.

Our first purchase of this nature was the completion of our acquisition of Shandong Newspaper in a Joint Venture. Shandong Newspaper’s business includes three main magazines: Shandong Broadcast & TV Weekly (Newspaper), TV Weekly Magazine and Modern Movie Times Magazine (Bi-Weekly). We intend to invest our acquisition cost in this Joint Venture to increase sales and advertising revenues of its periodicals in order to become profitable, and to cross market with our other asset, Jinan Broadband. No assurance can be made that we will be able to raise capital if and as needed.

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

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

The Company pays approximately $73,000 (500,000 RMB) annually for rent at its facilities in Jinan, China, renewable on an annual basis. The Company paid approximately $47,000 (RMB 325,000) for 6 months rent in 2008 for its Shandong Media facility, renewable on an annual basis at $94,000.

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

~~In April of 2009 we completed our acquisition of AdNet, an internet café content and adverting provider. Additional specific information relating to this acquisition can be found in Item 1, above.~~

~~2007 Equity Financing~~

Simultaneously with the closing of our acquisition of China Broadband Cayman, and as a necessary condition thereto in order to fund our first payment for the acquisition of the broadband business in China, we conducted the first closing of our private offering pursuant to which we entered into subscription agreements with investors for the sale of 6,000,000 shares of common stock and 3,000,000 Redeemable Common Stock Purchase Warrants, exercisable at $2.00 per share (the “Warrants”). This offering was conducted through WestPark Capital, Inc. as placement agent, on a “best efforts, $3,000,000 minimum, $4,000,000 maximum” basis. During the six months ended June 30, 2007 we raised an additional $1,000,000 such that we sold the aggregate maximum of $4,000,000 in this offering consisting of an aggregate of 8,000,000 shares and 4,000,000 warrants to accredited investors. Placement fees and expenses paid during the year ended December 31, 2007 in connection with the offering were approximately $420,500.

We used $2,572,000 of the proceeds of this offering from the first closing (inclusive of expenses) to pay the first installment of our acquisition of a 51% interest in the China based broadband cable internet business. This business acquisition is our only operating business as of April 1, 2007. We granted the investors registration rights in connection with this offering and compensated WestPark Capital, Inc., our placement agent, with a placement agent fee consisting of $320,000 plus expenses, and issued to them 640,000 warrants to purchase common stock at $.60 per share.

~~The material terms of the Broadband Acquisition, resulting in our becoming an operating entity in 2007, were that:~~

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

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

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

The following table provides the components of the net gain the Company recognized as a result of the Settlement Agreement in 2008 which is recorded in “Interest and other income (expense)” in the accompanying Statement of Operations:

On January 11, 2008, simultaneously with the entry into the Settlement Agreement, we entered into and consummated a note and warrant financing pursuant to a subscription agreement (the “Subscription Agreement”) with ten accredited investors (inclusive of Chardan Capital) with respect to the issuance of an aggregate of $4,971,250 principal amount of convertible notes (“Notes”) due January 11, 2013, and Class A Warrants to purchase an aggregate of 6,628,333 shares of common stock of the Company at $.60 per share expiring on June 11, 2013 (the “January 2008 Financing”).

While the gross proceeds of the offering were $4,850,000, Chardan Capital applied its 2.5% cash placement agent commission ($121,250) towards a subscription for Notes and Class A Warrants resulting in the issuance of an aggregate of $4,971,250 principal amount of Notes resulting in no cash payout to them at the closing for their transfer agent fee. Interest on the Notes compounds monthly at the annual rate of five percent (5%) with the maturity date on January 11, 2013, if not paid earlier. Each holder of a Note can convert all or any portion of the then aggregate outstanding principal amount of the Note, together with interest, into shares of Common Stock at a conversion price of $0.75 per share (6,628,333 shares as of the issuance date). The Notes have “full ratchet” anti dilution protection for the first three years, pursuant to which the conversion price of the Notes will be adjusted downward in the event of the issuance by the Company of common stock or rights to acquire common stock at prices below $.75 per share (or below such other conversion price of the Notes as is then in effect) to such lower price. Thereafter and until repaid, the Notes provide only for weighted average anti-dilution price protection adjustment. In addition, the Notes are subject to certain customary anti-dilution protections for stock splits, combinations or similar transactions of the Company.

~~In 2008 the Company incurred $345,000 in interest expense related to the Notes and Warrants. With the consent of the Note holders, the Company issued 329,856 shares to Note holders in lieu of cash.~~

In connection with their engagement as a placement agent, Chardan Capital has been compensated a $10,000 due diligence fee and reimbursement of legal and other expenses, and a placement agent fee of $121,250 (based on 2.5% of $4,850,000 of principal amount of Notes issued to other investors), which fee has, pursuant to the terms of their engagement agreement, been applied their investment in a $121,250 Note and 161,667 Class A Warrants at the same terms as all other investors in the offering and whose value is included and discount applied in the same manner as the Class A Warrants. In addition, Chardan Capital was compensated warrants to acquire 1,131,667 shares of the Company’s common stock at an exercise price of $.50 per share exercisable commencing January 11, 2008 and expiring on June 11, 2013 (the “Broker Warrants”). The Broker Warrants are identical to the Class A Warrants in all other material respects. The Company recognized the fair value of the Broker Warrants of $226,835 as debt issuance costs and is amortizing such value over the five year life of the Convertible Notes.

To incentivize the investors in January 2008 Financing and facilitate such financing, and as contemplated under the terms of the Settlement Agreement, Mr. Clive Ng, our Chairman and Majority Shareholder, assigned an aggregate of 7,017,814 shares of Common Stock beneficially owned by him to the January 2008 Financing investors (other than Chardan Capital) at a nominal purchase price of $.001 per share.

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

Simultaneously with the closing of the January 2008 Financing, and entry into the Settlement Agreement, Messrs. David Zale, James Cassano and Jonas Grossman were appointed as directors of the Company, joining Messrs. Clive Ng and Pu Yue. Prior to the appointment of Messrs. Zale, Cassano and Grossman, such persons had no affiliations or business relationship with the Company, except that Mr. Grossman was and continues to be, a partner and officer of Chardan Capital.

Our discussion and analysis of financial condition and results of operations is based on our consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States. The preparation of these financial statements and related disclosures in conformity with accounting principles generally accepted in the United States of America requires our management to make judgments, assumptions and estimates that affect the amounts reported in the consolidated financial statements and accompanying notes. Our management evaluates its estimates on an on-going basis based on historical experience and on various other assumptions it believes are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources.

Through WFOE, we acquired a 51% interest in Jinan Broadband effective April 1, 2007, and a 50% interest in the Shandong Media joint venture effective July 1, 2008. Accordingly, our historical experience with operations in China is limited and may change in the future as we continue to operate the companies. Actual results may differ from these estimates under different assumptions or conditions.

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

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

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

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

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

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

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

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

The businesses of the Company’s operating subsidiaries are currently conducted in and from China in Renminbi. In this report, all references to “Renminbi” and “RMB” are to the legal currency of China and all references to U.S. dollars, dollars, $ and US$ are to the legal currency of the United States. The Company makes no representation that any Renminbi or U.S. dollar amounts could have been, or could be, converted into U.S. dollars or Renminbi, as the case may be, at any particular rate, the rates stated below, or at all. The Chinese government imposes control over its foreign currency reserves in part through direct regulation of the conversion of Renminbi into foreign exchange and through restrictions on foreign trade. The Company uses the U.S. dollar as its reporting and functional currency.

Translation adjustments are reported as other comprehensive income or expenses and accumulated as other comprehensive income in the equity section of the balance sheet. Financial information is translated into U.S. dollars at prevailing or current rates respectively, except for revenues and expenses which are translated at average current rates during the reporting period. Exchange gains and losses resulting from retained profits are reported as a separate component of stockholders’ equity.

In April 2008, the FASB issued FASB Staff Position FAS 142-3, “Determination of the Useful Life of Intangible Assets” (“FSP FAS 142-3”). FSP FAS 142-3 amends the factors that should be considered in developing renewal or extension assumptions used to determine the useful life of a recognized intangible asset under SFAS No. 142, “Goodwill and Other Intangible Assets” (“SFAS 142”), and requires additional disclosures. The objective of FSP FAS 142-3 is to improve the consistency between the useful life of a recognized intangible asset under SFAS 142 and the period of expected cash flows used to measure the fair value of the asset under SFAS No. 141 (R), “Business Combinations” (“SFAS 141(R)”), and other accounting principles generally accepted in the United States of America. FSP FAS 142-3 applies to all intangible assets, whether acquired in a business combination or otherwise and shall be effective for financial statements issued for fiscal years beginning after December 15, 2008, and interim periods within those fiscal years. The guidance for determining the useful life of intangible assets shall be applied prospectively to intangible assets acquired after the effective date. The disclosure requirements apply prospectively to all intangible assets recognized as of, and subsequent to, the effective date. Early adoption is prohibited. The Company does not expect the adoption of FSP FAS 142-3 to have a material impact on its consolidated financial statements.

In March 2008, the FASB issued Statement No. 161, Disclosures about Derivative Instruments and Hedging Activities (“SFAS 161”), which is effective January 1, 2009. SFAS 161 requires enhanced disclosures about derivative instruments and hedging activities to allow for a better understanding of their effects on an entity’s financial position, financial performance, and cash flows. Among other things, SFAS 161 requires disclosures of the fair values of derivative instruments and associated gains and losses in a tabular formant. SFAS 161 is not currently applicable to the Company since the Company does not have derivative instruments or hedging activities

In February 2008, the FASB issued FASB Staff Position No. 157-2, Effective Date of FASB Statement No. 157 ("FSP 157-2"), which delays the effective date of SFAS 157 for nonfinancial assets and nonfinancial liabilities. Therefore, the Company has delayed application of SFAS 157 to its nonfinancial assets and nonfinancial liabilities, which include assets and liabilities acquired in connection with a business combination, goodwill, intangible assets and asset retirement obligations recognized in connection with final capping, closure and post-closure landfill obligations, until January 1, 2009. The Company is currently evaluating the impact of SFAS 157 for nonfinancial assets and liabilities on the Company's financial position and results of operations.

In February 2007, the FASB issued SFAS No. 159, The Fair Value Option for Financial Assets and Financial Liabilities. SFAS No. 159 permits companies to choose to measure many financial instruments and certain other items at fair value. SFAS No. 159 is effective for financial statements issued for fiscal years beginning after November 15, 2007. The adoption of SFAS No. 159 did not have a material impact on our consolidated financial statements.

In December 2007, the FASB issued SFAS No. 141 (R), Business Combinations, and SFAS No. 160, Noncontrolling Interests in Consolidated Financial Statements. SFAS No. 141 (R) requires an acquirer to measure the identifiable assets acquired, the liabilities assumed and any noncontrolling interest in the acquiree at their fair values on the acquisition date, with goodwill being the excess value over the net identifiable assets acquired. SFAS No. 160 clarifies that a noncontrolling interest in a subsidiary should be reported as equity in the consolidated financial statements. The calculation of earnings per share will continue to be based on income amounts attributable to the parent. SFAS No. 141 (R) and SFAS No. 160 are effective for financial statements issued for fiscal years beginning after December 15, 2008. Early adoption is prohibited. The Company has not yet determined the effect on our consolidated financial statements, if any, upon adoption of SFAS No. 141 (R) or SFAS No. 160. However, future acquisitions, including AdNet, will be accounted for in accordance with these new standards.

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

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

The exchange rate between the Renminbi and the U.S. dollar is subject to the PRC foreign currency conversion policies which may change at any time. The exchange rate at April 13, 2009 was approximately 6.836 Renminbi to 1 U.S. dollar, and the exchange rate is currently permitted to float within a very limited range.

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

The Company primarily invests its cash in checking, bank money market and savings accounts. As of March 31, 2009, the Company has not entered into any type of hedging or interest rate swap transaction.

~~Item 8. Financial Statements and Supplementary Data~~

~~Item 9A. Controls and Procedures~~

Management, under the supervision and with the participation of our Principal Executive Officer and Principal Financial Officer, reviewed and evaluated the effectiveness of our "disclosure controls and procedures" (as defined in the Securities Exchange Act of 1934 Rules 13a-15(e) and 15d-15(e)) as of the end of the period covered by this report (December 31, 2008) and concluded that the disclosure controls and procedures were effective to ensure that material information relating to the Company is recorded, processed, summarized, and reported in a timely manner within the time periods specified in the Commissions rules and forms. The term “disclosure controls and procedures” as used herein, includes, without limitation, those controls and procedures designed to ensure that information required to be disclosed by an issuer in the reports that it files or submits under the Exchange Act is accumulated and communicated to our management (including our principal executive and financial officers or persons performing similar functions) as appropriate to allow timely decisions regarding required disclosure.

Management of the Company realizes that the assessment process is an ongoing one. Accordingly, at the time of the final filing hereof, the Company's certifying officers reviewed and evaluated the effectiveness of our disclosure controls and procedures and concluded that the disclosure controls and procedures were effective.

The Company has had previous late filings as a result of its PRC based operations and difficulty in preparation and conversion of PRC financial statements. This was primarily due to its mid year acquisitions of operating businesses in the PRC in both 2007 and then in early 2008. In addition, the Company determined in 2008 that it was required to restate its financial statements, as previously disclosed, in order to reflect, among other changes, the amortization of revenues from pre-paid internet subscribers, and has done so. The Company hired an outside consulting firm in the PRC to supplement the accounting personnel at the Company to help address these concerns.

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

~~Management’s Report on Internal Control over Financial Reporting~~

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

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

Management assessed the effectiveness of the Company’s internal control over financial reporting as of December 31, 2008. In making this assessment, management used the criteria set forth by the Committee of Sponsoring Organization of the Treadway Commission (COSO) in Internal Control-Integrated Framework. Based on that assessment, Management has concluded that the Company’s internal control over financial reporting was effective as of December 31, 2008. Management has, during 2008, implemented controls that it believes are effective, namely hiring an outside accounting consulting firm in the PRC to supplement the Company’s accounting personnel and creating controls so as to detect and amortize revenues from prepaid subscribers.

This Form 10-K does not include an attestation report of the Company's registered public accounting firm regarding internal control over financial reporting. Management's report was not subject to attestation by the company's registered public accounting firm pursuant to temporary rules of the Securities and Exchange Commission that permit the Company to provide only management's report in this annual report.

~~Item 9B. Other Information~~

Effective as of the March 13, 2008, the board of directors of the company approved the China Broadband, Inc. 2008 Stock Incentive Plan (the “Plan”), pursuant to which options or other similar securities may be granted. Qualified or Non-qualified Options to purchase up to 2,500,000 shares of the Company’s common stock may be issued under the Plan. The Plan may also be administered by an independent committee of the board of directors. Currently, only 317,500 options were issued under the plan, of which 100,000 were granted to Mr. Urbach as per his employment agreement with the company (as described below) with the remaining 217,500 issued to certain directors and a consultant in 2008.

~~Item 10. Directors, Executive Officers and Corporate Governance~~

~~The executive officers and directors of the Company as of the date hereof are as~~ ~~set forth in the below chart.~~

Simultaneously with the closing of the Convertible Note Financing in January of 2008, and entry into the Settlement Agreement, Messrs. David Zale, James Cassano and Jonas Grossman were appointed as directors of the Company, joining Messrs. Clive Ng and Pu Yue. Prior to the appointment of Messrs. Zale, Cassano and Grossman, such persons had no affiliations or business relationship with the Company, except that Mr. Grossman was and continues to be, a partner and officer of Chardan Capital which received a placement agent fee of notes and warrants in connection with the January 2008 Financing as described above. Additionally, the board appointed Mr. Tom Lee as new Chief Executive Officer and Principal Executive Officer on January 11, 2008 who has resigned effective April 8, 2008:

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

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

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

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

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

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

~~Tom Lee~~ was appointed as Chief Executive Officer effective as of January 11, 2008 through April 8, 2008 and is no longer with the Company. Mr. Lee has twenty years of successful business development and management experience in high-tech industry and extensive hands-on experiences as co-owner and director of business development in the PRC. Mr. Lee has served as Vice President of Business Development of TiVO Great China (TGC) Inc. since 2006. Prior to such time and since 2005, Mr. Lee served as General Manager of Sales and Marketing of DVN Broadband Technologies Inc. Between 1999 and 2003, Mr. Lee was the VP of Asia Sales and Marketing of nSTREAMS Technologies Inc., an international provider of Interactive TV and video server based technologies. Prior to this time and since 1995, he became the Director of Business Development of Silicon Graphics Inc., Asia-Pacific, a company which provides high-performance server and storage solutions. Mr Lee was employed in various capacities for Silicon Graphics, Inc. Mr. Lee served as the VP of Sales from 1987 to 1988 for Apollo Computer Corporation in Taiwan. From 1985 to 1986, Mr. Lee served as Director of Sales for the Minicomputer System Division of Systex Corp in Taiwan. Before that, he was the Sales Manager of Oversea Computer Corp in Taiwan since 1981. Mr. Lee received training at SGI senior manager training school from 1995 to 1997. He attended the Stanford University Economic Management program in the summer of 1996. Mr. Lee received his bachelor’s degree in Industry Management from the National Taiwan Industry Technology Institute of Taiwan.

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

~~Additionally, Mr. Ng waived his right to receive any and all accrued salary compensation owed to him by the Company, through January 11, 2008, all of which has accrued but were not paid.~~

~~None.~~

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

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

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

~~Appointment of Dr. Lu As Director Pursuant to AdNet Acquisition~~

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

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

~~Board of Directors Committees~~

Although, we are not an issuer listed on a national securities exchange or listed in an automated inter-dealer quotation system of a national securities association and are not required to have an audit committee, we have established an audit committee, nominating committee and compensation committee with the committee heads James Cassano, David Zale and Jonas Grossman, respectively. Messrs Cassano, Zale and Grossman were also each appointed to the foregoing committees as of June 13, 2008. The committees have not met during 2008.

~~We do not currently have an Advisory Board.~~

~~Our Board of Directors took action by written consent in lieu of meeting two times and held one board meeting during the 2008 fiscal year.~~

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

Section 16(a) of the Securities Exchange Act of 1934, as amended, requires our directors, executive officers, and stockholders holding more than 10% of our outstanding common stock, to file with the Securities and Exchange Commission initial reports of ownership and reports of changes in beneficial ownership of our common stock. Executive officers, directors and greater-than-10% stockholders are required by SEC regulations to furnish us with copies of all Section 16(a) reports they file. To our knowledge, based solely on review of the copies of such reports furnished to us for the period ended December 31, 2008, the Section 16(a) reports required to be filed by our executive officers, directors and greater-than-10% stockholders were filed on a timely basis, other than Mr. Tom Lee who has not filed any report upon departing the company.

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

~~Item 11. Executive Compensation~~

~~Summary of Compensation Table~~

The following table sets forth information concerning the total compensation that we have paid or that has accrued on behalf of our chief executive officer and other executive officers with annual compensation exceeding $100,000 during the years ended December 31, 2008 and 2007.

~~The following table sets forth information with respect to grants of options to purchase our common stock to the named executive officers during the fiscal year ended December 31, 2008.~~

~~2008 Director Compensation~~

We currently do not compensate our directors. Directors are eligible however to participate in our 2008 Stock Option Plan. Our three independent directors, Mr. Jonas Grossman, David Zale and James Cassano were each granted options to acquire 50,000 shares at $.50 per share, becoming exercisable over three years, commencing June 2008.

The Company entered into a consulting agreement with Maxim Financial Corporation on January 23, 2007, the provisions of which are described below. Additionally, in connection with the Share Exchange and acquisition of the business acquisition, the Company entered into the employment agreements set forth below with Messrs. Ng and Yue, which were amended on January 11, 2008 in connection with the Settlement Agreement and related financing.

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

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

The following table sets forth certain information regarding our common stock beneficially owned as of March 20, 2009 for (i) each shareholder we know to be the beneficial owner of 5% or more of our outstanding common stock, (ii) each of our executive officers and directors, and (iii) all executive officers and directors as a group. In general, a person is deemed to be a "beneficial owner" of a security if that person has or shares the power to vote or direct the voting of such security, or the power to dispose or to direct the disposition of such security. A person is also deemed to be a beneficial owner of any securities of which the person has the right to acquire beneficial ownership within 60 days. To the best of our knowledge, subject to community and martial property laws, all persons named have sole voting and investment power with respect to such shares, except as otherwise noted. At March 20, 2009, we had 50,585,455 shares of common stock outstanding

Amount of Percent of
Beneficial Beneficial
Name of Beneficial Owner Ownership (1) Ownership (1)
(2 ) Clive Ng 26,002,915 (3) 51.4 %
(4 ) Marc Urbach 50,000 0.1 %
(5 ) Pu Yue 0 0.0 %
(6 ) David Zale 100,000

(6) 0.2 %
(7 ) James Cassano 25,000 0.0 %
(8 ) Jonas Grossman 352,375 (9) 0.7 %
Other Persons (Non Executives etc.)
(10 ) Mark L. Baum, Esq. 3,000,000 (10) 5.9 %
Oliveira Capital, LLC 3,026,649 6.0 %
All Directors and Executive Officers 26,530,290 52.4 %

42

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

In January of 2008, and to avoid potential disputes with management, we entered into a Settlement Agreement with Mr. Clive Ng and Pu Yue and amended their employment agreements. These agreements were ratified by our entire board and by a special independent committee comprised of Mr. David Zale and Mr. Jonas Grossman after their appointment. Additional specific information relating to this Settlement Agreement and the related employment agreements are provided in the “Item 7. Management Discussion and Analysis of Financial Condition and Results of Operations” section above, the provisions of which are incorporated by reference herein.

In October of 2006 we entered into a letter of intent to acquire all of the shares of China Broadband Cayman. Prior to such time none of the Broadband Shareholders, as principals of China Broadband Cayman, had any affiliation with the Company.

Pursuant to the foregoing agreement, we have acquired China Broadband Cayman on January 23, 2007 in exchange for assumption by us of $325,000 7% Convertible Promissory Notes which were convertible to 2.6% of the outstanding common stock of the Company (currently estimated at 1,300,0000, based on 50,000,000 shares outstanding), the issuance of 3,582,753 shares of common stock to 88 Holdings, Inc., and 31,000,000 shares of common stock to China Broadband Partners, both of which are entities owned or controlled by Mr. Clive Ng, 1,900,000 shares of common stock to Stephen P. Cherner and 1,382,753 shares of common stock to MVR Investment, LLC. In addition, 2,000,000 shares were to be issued pursuant to the Share Exchange Agreement pro rata to said shareholders, subject to cancellation on a share by share basis to the extent that greater than 6,000,000 shares were sold in our private offering. As a result of the Company closing on the maximum offering amount of 8,000,000 shares, none of these shares will be issued. Additionally and pursuant to a separate transaction, Maxim Financial has also acquired 300,000 shares of common stock from an entity owned by our director and shareholder prior to the Broadband Acquisition, Mark L. Baum.

Our acquisition of China Broadband Cayman was negotiated on an arms length basis between the principals of China Broadband Cayman and our former principal officer and director. There was no relationship between the parties prior to such transaction. Additional specific details relating to these transactions is provided in Item 1 above and previous filings.

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

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

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

A controlling majority of our shares are owned directly or indirectly by Clive Ng, our Chairman and President. As such, Mr. Ng will have the ability to control our business decisions and appointment or removal of all officers and directors.

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

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

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

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

~~Our Board of Directors selected UHY, LLP as our auditors for the year ended December 31, 2008.~~

~~UHY, LLP Certified Public Accountants, billed us $120,000 in fees for our annual audit for the year ended December 31, 2008.~~

~~We did not pay any fees to UHY, LLP for assurance and related services that are not reported under Audit Fees above, during our fiscal years ending December 31, 2008 and December 31, 2007.~~

~~We did not pay any fees to UHY, LLP Certified Public Accountants, for tax compliance, tax advice, tax planning or other work during our fiscal years ending December 31, 2008 and December 31, 2007.~~

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

Large ~~accelerated filer~~Accelerated Filer o	Accelerated ~~filer~~Filer o

~~Non-accelerated filer~~Non-Accelerated Filer o(Do not check if a smaller reporting company)	Smaller reporting company x

~~Class~~		~~Outstanding~~
~~Common Stock, $0.001 par value~~		~~50,585,455 shares~~

		~~Page~~
~~PART I~~

~~Item 1.~~	~~Business~~	1
~~Item 1A.~~	~~Risk Factors~~
~~Item 2.~~	~~Properties~~	18
~~Item 3.~~	~~Legal Proceedings~~	18
~~Item 4.~~	~~Submission of Matters to a Vote of Security Holders~~	18

~~PART II~~		19

~~Item 5.~~	~~Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities~~	19
~~Item 6.~~	~~Selected Financial Data~~	20
~~Item 7.~~	~~Management’s Discussion and Analysis of Financial Condition and Results of Operations~~	21
~~Item 7A.~~	~~Quantitative and Qualitative Disclosures about Market Risk~~	33
~~Item 8.~~	~~Financial Statements and Supplementary Data~~	34
~~Item 9.~~	~~Changes in and Disagreements with Accountants on Accounting and Financial Disclosures~~	35
~~Item 9A.~~	~~Controls and Procedures~~	35
~~PART III~~		37

~~Item 10.~~	~~Directors, Executive Officers and Corporate Governance~~	37
~~Item 11.~~	~~Executive Compensation~~	41
~~Item 12.~~	~~Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters~~	42
~~Item 13.~~	~~Certain Relationships and Related Transactions, and Director Independence~~	43
~~Item 14.~~	~~Principal Accounting Fees and Services~~	45

~~PART IV~~
~~Item 15.~~	~~Exhibits, Financial Statement Schedules~~	46

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

Title of each class		Name of each exchange on which registered
None		None

~~Description~~		~~License/Permit~~
~~PRC Newspaper Publication License for Shandong Broadcast & TV Weekly~~		~~National Unified Publication No: CN 37-0014~~
~~PRC Magazine Publication License for View Weekly~~		~~Ruqichu Nor:1384~~
~~PRC Magazine Publication License for Modern Movie & TV Biweekly~~		~~Ruqichu No:1318~~
~~Advertising License for Shandong Broadcast & TV Weekly~~		~~3700004000093~~
~~Advertising License for View Weekly~~ ~~Advertising License for Modern Movie & TV Biweekly~~		~~3700004000186~~ ~~3700004000124~~

Fiscal Years:
2008	High		Low
December 31, 2008	$	0.02	$	.0.02
September 30, 2008	$	0.10	$	.0.10
June 30, 2008	$	0.50	$	0.50
March 31, 2008	$	1.15	$	0.51
2007
December 31, 2007	$	4.50	$	3.00
September 30, 2007	$	4.00	$	4.00
June 30, 2007	$	4.00	$	1.75
March 31, 2007	$	3.00	$	2.00

Plan Category	(a) Number of securities to be issued upon exercise of outstanding options, warrants and rights	(b) Weighted-average exercise price of outstanding options, warrants and rights	(c) Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a))
Equity compensation plans approved by security holders (1)	-0-	n/a	-0-
Equity compensation plans not approved by security holders (2)	317,500	n/a	-0-
Total	-0-	n/a	-0-

Fair value of Cablecom Holdings Shares	$	2,515,500
Waiver of accrued compensation		212,054
Warrant extensions		(1,426,862	)


Net Gain	$	1,300,692

	Years Ended						Amount			%
	December 31,			December 31,			Increase /			Increase /
	2008			2007			(Decrease)			(Decrease)

Revenue	$	6,361,970		$	2,839,197		$	3,522,773			124	%
Cost of revenue		3,740,381			1,657,979			2,082,402			126	%
Gross profit		2,621,589			1,181,218			1,440,371			122	%

Selling, general and adminstrative expenses		1,923,386			954,382			969,004			102	%
Professional fees		619,405			628,490			(9,085	)		-1	%
Depreciation and amortization		3,037,199			1,795,501			1,241,698			69	%

Income / (loss) from operations		(2,958,401	)		(2,197,155	)		(761,246	)		35	%

Interest & other income / (expense)		(912,097	)		(404,553	)		(507,544	)		125	%

Income / (loss) before minority interest		(3,870,498	)		(2,601,708	)		(1,268,790	)		49	%

Minority interest loss in operating subsidiaries		609,630			439,722			169,908			39	%

Income / (loss) before income tax		-3,260,868			-2,161,986			(1,098,882	)		51	%

Income tax benefit		-93,997			147,955			(241,952	)		-164	%

Net income / (loss)	$	(3,354,865	)	$	(2,014,031	)	$	(1,340,834	)		67	%

	2008		2007
Accounting	$	259,000	$	250,000
Consulting	$	147,000	$	223,000
Legal	$	214,000	$	156,000
Total	$	619,000	$	629,000

	2008		2007
Depreciation:	$	2,800,000	$	1,718,000
Amortization:	$	237,000	$	77,000
Total	$	3,037,000	$	1,795,000

	Year Ended												Year Ended
	December 31, 2008												December 31, 2007
				% of												% of
				Total												Total
	Operating			Revenue			Non-Operating			Total			Operating			Revenue			Non-Operating			Total

Revenue	$	6,361,970					$	-		$	6,361,970		$	2,839,197					$	-		$	2,839,197
Cost of revenue		3,740,381						-			3,740,381			1,657,979						-			1,657,979
Gross profit		2,621,589			41.2	%		-			2,621,589			1,181,218			41.6	%		-			1,181,218

Selling, general and adminstrative expenses		1,100,667			17.3	%		822,719			1,923,386			367,837			13.0	%		586,545			954,382
Professional fees		24,808			0.4	%		594,597			619,405			-			0.0	%		628,490			628,490
Depreciation and amortization		2,800,815			44.0	%		236,384			3,037,199			1,718,277			60.5	%		77,226			1,795,503

Income / (loss) from operations		(1,304,701	)		-20.5	%		(1,653,700	)		(2,958,401	)		(904,896	)		-31.9	%		(1,292,261	)		(2,197,157	)
Interest & other income / (expense)
Settlement gain		-						1,300,692			1,300,692			-						-			-
Interest income / (expense), net		24,218						(326,988	)		(302,770	)		8,441						(2,006	)		6,435
Gain (loss) on sale of securities		-						(102,505	)		(102,505	)		-						-			-
Loss on securities write-down		-						(1,797,378	)		(1,797,378	)		-						-			-
Other		(122	)					(10,014	)		(10,136	)		(936	)					(410,053	)		(410,989	)

Income / (loss) before minority interest		(1,280,605	)					(2,589,893	)		(3,870,498	)		(897,391	)					(1,704,320	)		(2,601,711	)

Minority interest loss in operating subsidiaries		-						609,630			609,630			-						439,722			439,722

Income / (loss) before income tax		(1,280,605	)		-20.1	%		(1,980,263	)		(3,260,868	)		-897,391			-31.6	%		-1,264,598			-2,161,989

Income tax benefit / (expense)		-			0.0	%		(93,997	)		(93,997	)		-						147,955			147,955

Net income / (loss)	$	(1,280,605	)		-20.1	%	$	(2,074,260	)	$	(3,354,865	)	$	(897,391	)		-31.6	%	$	(1,116,643	)	$	(2,014,034	)

		~~Page~~

~~Report of Independent Registered Public Accounting Firms~~		~~F-1~~

~~Consolidated Financial Statements:~~

~~Balance Sheets as of December 31, 2008 and 2007~~		~~F-2~~

~~Statements of Operations for the years ended December 31, 2008 and 2007~~		~~F-3~~

~~Statements of Shareholders’ Equity and Comprehensive Loss for the years ended December 31, 2008 and 2007~~		~~F-4~~

~~Statements of Cash Flows for the years ended December 31, 2008 and 2007~~		~~F-5~~

~~Notes to Consolidated Financial Statements~~		~~F-6~~

~~CHINA BROADBAND, INC. AND SUBSIDIARIES~~
~~CONSOLIDATED BALANCE SHEETS~~
~~December 31, 2008 and 2007~~

	2008			2007
ASSETS
Current assets:
Cash and cash equivalents	$	4,425,529		$	472,670
Marketable equity securities		254,496			-
Accounts receivable		136,709			136,655
Inventory		877,309			642,313
Prepaid expense		46,380			14,781
Other current assets		153,277			73,947
Total current assets		5,893,700			1,340,366

Property and equipment, net		9,299,473			10,333,105
Intangible assets		4,218,758			1,981,307
Other assets		692,911			-
Total assets	$	20,104,842		$	13,654,778

LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable	$	1,237,251		$	835,257
Accrued expenses		936,134			554,073
Deferred revenue		1,382,103			1,252,313
Payable to Shandong Media		145,679			-
Payable to Jinan Parent		2,795,472			3,308,443
Other current liabilities		72,013			25,905
Total current liabilities		6,568,652			5,975,991

Long-term liabilities
Convertible notes payable		4,564,427			-
Deferred tax liability		790,617			366,672
Total long-term liabilities		5,355,044			366,672

Total liabilities		11,923,696			6,342,663

Minority Interest		6,637,631			4,879,802

Common shares to be issued		-			410,053

Shareholders' equity
Preferred stock, $.001 par value; 5,000,000 shares authorized, no shares issued and outstanding		-			-
Common stock, $.001 par value; 95,000,000 shares authorized, 50,585,455 and 50,048,000 issued and outstanding		50,586			50,048
Additional paid-in capital		13,372,358			10,485,874
Accumulated deficit		(12,200,287	)		(8,845,426	)
Accumulated other comprehensive income (loss)		320,858			331,764
Total shareholders' equity		1,543,515			2,022,260

Total liabilities, minority interest and shareholders' equity	$	20,104,842		$	13,654,778

											Accumulated
					Additional						Other
	Common		Par		Paid-in			Accumulated			Comprehensive					Comprehensive
	Shares		Value		Capital			Deficit			Income(loss)		Total			Loss

Balance December 31, 2006		543,494	$	535	$	6,705,918		$	(6,831,393	)	$	-	$	(124,940	)

Shares issued for services		2,300,000		2,300		26,321								28,621

Shares issued for share
exchange		37,865,506		37,865		(37,865	)							-

Shares issued upon
conversion of convertible
promissory notes		1,348,000		1,348		227,200								228,548

Shares issued in private
placement offering		8,000,000		8,000		3,992,000								4,000,000

Debt issuance cost associated
with private placement
offering and conversion of
convertible promissory notes						(427,700	)							(427,700	)

Comprehensive loss:
Net loss									(2,014,031	)				(2,014,031	)	(2,014,031	)
Foreign currency translation
adjustments												331,764		331,764		331,764

Balance December 31, 2007		50,057,000	$	50,048	$	10,485,874		$	(8,845,424	)	$	331,764	$	2,022,262		(1,682,267	)

Warrant valuation associated with
convertible notes payable & other						745,694								745,694

Option valuation associated with
employment agreeement						44,898								44,898

Shares issued for penalty
of non-registration		207,599		208		421,970								422,178

Warrant valuation associated with
extension from settlement agreement						1,426,862								1,426,862

Shares issued in lieu of convertible
note interest		329,856		330		247,061								247,391

Comprehensive loss:
Net loss									(3,354,865	)				(3,354,865	)	(3,354,865	)
Foreign currency translation
adjustments												320,858		320,858		320,858

Balance December 31, 2008		50,594,455	$	50,586	$	13,372,359		$	(12,200,289	)	$	320,858	$	1,543,514		(3,034,007	)

~~CHINA BROADBAND, INC. AND SUBSIDIARIES~~
~~CONSOLIDATED STATEMENTS OF CASH FLOWS~~
~~Years Ended December 31, 2008 and 2007~~

	2008			2007
Cash flows from operating
Net loss	$	(3,354,864	)	$	(2,014,033	)
Adjustments to reconcile net loss to net cash provided by operating activities
Stock compensation expense		318,818			438,674
Depreciation and amortization		3,369,930			1,795,501
Deferred income tax		423,945			(147,954	)
Minority interest		(609,630	)		(439,722	)
Loss on sale and write-down of marketable equity securities		1,899,883			-
Gain on settlement agreement		(1,300,692	)		-
Change in assets and liabilities,
Accounts receivable		(54	)		442,640
Inventory		(234,996	)		667,357
Prepaid expenses and other assets		213,177			(88,728	)
Accounts payable and accrued expenses		1,187,894			247,454
Deferred revenue		129,790			230,889
Other		(611,512	)		(17,416	)
Net cash provided by operating activities	$	1,431,513		$	1,129,494

Cash flows from investing activities:
Proceeds from sale of marketable equity securities		361,121			-
Acquisition of property and equipment		(2,061,401	)		(2,443,055	)
Net cash used in investing activities	$	(1,700,280	)	$	(2,443,055	)

Cash flows from financing activities
Proceeds from issuance of convertible notes payable		4,850,000			4,000,000
Issuance costs associated with private placement and convertible notes		(104,500	)		(420,500	)
Payable to Jinan Parent		(512,971	)		(2,228,203	)
Net cash provided by financing activities	$	4,232,529		$	1,351,297

Effect of exchange rate changes on cash	$	(10,903	)	$	331,764

Net increase in cash and cash equivalents		3,952,859			369,500
Cash and cash equivalents at beginning of period		472,670			103,170

Cash and cash equivalents at end of period	$	4,425,529		$	472,670


Supplemental Cash Flow Information:

Cash paid for interest	$	-		$	10,490
Notes payable converted to common stock	$	-		$	325,000
Value assigned to shares issued as penalty
for non-registration of 7% convertible notes	$	12,125		$	410,053
Value assigned to shares issued in lieu of cash for interest expense	$	247,392		$	-

Acquisition of Shandong Media:
Fair value of assets acquired	$	4,184,022		$	-
Liabilities assumed	$	-		$	-
Consideration paid:
Cash paid	$	1,311,113		$	-
Cash amount owed	$	780,899		$	-
Minority interest	$	2,345,777		$	-

Acquisition of Jinan Broadband
Fair value of assets acquired	$	-		$	11,497,317
Liabilities assumed	$	-		$	2,186,360
Consideration paid:
Cash paid	$	3,200,000		$	2,752,125
Cash amount owed	$	-		$	3,200,000
Minority interest	$	4,291,854		$	5,319,524

Convertible Note Issuance
Proceeds received from issuance of Convertible Notes	$	4,850,000		$	-
Debt issuance costs converted to Convertible Notes	$	121,250		$	-
Debt issuance costs not converted to Convertible Notes	$	226,835		$	-

	2008			2007

Furniture, fixtures and electrical appliances	$	835,000		$	631,000
Headend facilities and fiber infrastructure		13,177,000			11,420,000
Other		27,000			-
Total property and equipment		14,039,000			12,051,000
Less: accumulated depreciation		(4,740,000	)		(1,718,000	)
Net carrying value	$	9,299,000		$	10,333,000

Depreciation expense	$	2,800,000		$	1,718,000

	2008			2007
Service agreement	$	1,734,404		$	2,058,508
Publication right		993,823			-
Customer relationships		240,982			-
Operating permits		1,487,555			-
Total intangible assets		4,456,764			2,058,508
Less: accumulated amortization		(238,006	)		(77,194	)
Intangible assets, net	$	4,218,758		$	1,981,314

Amortization expense	$	(160,812	)		(77,194	)

	2008		2007

Stock issued for consulting services	$	-	$	28,621
Stock option amortization		44,898		-
Warrant amortization		14,198		-
Stock issued in lieu of interest		247,391		410,053
Stock issued as non registration penalty		12,125		-


	$	318,612	$	438,674

	~~2008~~

~~Risk free interest rate~~		~~3.53~~	%
~~Volatility~~		~~188.76~~	%
~~Dividend yield~~		—
~~Expected option life~~	~~4 years~~

	Shares		Weighted Average Exercise Price			Weighted Average Remaining Contractual Term
					��
Options outstanding at January 1, 2008		-	$	-			-
Options granted		317,500		0.66			6.50
Options exercised		-		-			-
Options terminated and expired		-		-			-
Options outstanding at December 31, 2008		317,500		0.67			6.50

Options exercisable at December 31, 2008		145,000		0.59			6.50

	Number of
	Warrants		Exercise		Expiration
	Issued		Price		Date

Maxim Financial Corporation		3,974,800	$	0.60		1/11/2013
WestPark Capital, Inc.		640,000	$	0.60		1/11/2013
BCGU LLC		500,000	$	0.60		1/11/2013
2007 Private Placement Investor Warrants		4,000,000	$	2.00		1/11/2013
January 2008 Financing Class A Warrants		6,628,333	$	0.60		1/11/2013
Chardan Capital Broker Warrants		1,131,667	$	0.50		6/11/2013

		16,874,800

	2008			2007
Deferred tax assets

U.S. NOL - pre-stock exchange transaction	$	2,280,194		$	2,280,194
U.S. NOL - subsequent to stock exchange transaction		510,082			347,986
Foreign NOL		219,379			93,393
Deferred revenue		345,526			-
Fixed assets cost basis		409,876			-
Accrued payroll		133,716			72,098

Total deferred tax assets		3,898,772			2,793,671

Less: valuation allowance		(3,649,485	)		(2,750,133	)

Deferred tax liability - intangible assets		(1,039,905	)		(410,210	)

Net deferred tax liability	$	(790,617	)	$	(366,673	)

	2008			2007

Net loss before income taxes		(3,870,499	)		(2,161,988	)

Expected income tax benefit at 34%		(1,315,970	)		(735,076	)

Nondeductible expenses		273			43,662
Rate-differential on foreign income invested indefinitely		135,132			110,848
WFOE NOL not recognized for indefinite reversal		12,681			14,601
Depreciation of fixed assets and amortization of intangible assets		123,779			-
Deferred revenue		(345,526	)		-
Stock options and warrants		(26,830	)		-
Write-down in value of available for sale securities		611,109			-
Increase in valuation allowance		899,352			418,010

Income tax expense (benefit)	$	93,998		$	(147,955	)

~~Name~~	~~Age~~	~~Position~~
~~Marc Urbach~~	36	~~President, Principal Executive Officer~~
~~Tom Lee~~	51	~~Chief Executive Officer (January 11,2008 - April 8, 2008)~~
~~Clive Ng~~	46	~~Chairman, Director~~
~~Pu Yue~~	36	~~Vice Chairman of China Broadband, Ltd. and China Broadband, Inc., and Principal Accounting Officer and Principal Financial Officer~~
~~James Cassano~~	62	~~Director~~
~~David Zale~~	55	~~Director~~
~~Jonas Grossman~~	34	~~Director~~

												Change in
												Pension Value
										Non-Equity		and Nonqualified
										Incentive		Deferred
						Stock		Option		Plan		Compensation		All Other
	Year	Salary		Bonus		Awards		Awards		Compensation		Earnings		Compensation		Total
(1) Clive Ng,	2008	$	242,607	$	-	$	-	$	-	$	-	$	-	$	-	$	242,607
Chairman	2007		-														-

(2) Yu Pu,	2008		120,000														120,000
Vice Chairman	2007		101,786														101,786

Marc Urbach,	2008		102,759												12,016		114,775
President and Principal
Executive Officer	2007		-

(3) Mark L. Baum,	2008		-
Former President, CFO
and Director	2007		-

(3) James Panthe, II	2008		-
Former Director and
Secretary	2007		-

			Option Awards				Stock Awards

								Equity	Equity
			Equity					Incentive	Incentive
			Incentive					Plan Awards:	Plan Awards:
			Plan Awards:				Market	Number of	Market or
	Number of	Number of	Number of			Number of	Value of	Unearned	Payout Value
	Securities	Securities	Securities			Shares or	Shares or	Shares,	of Unearned
	Underlying	Underlying	Underlying			Units of	Units of	Units or	Shares, Units or
	Unexercised	Unexercised	Unexercised	Option		Stock	Stock	Other Rights	Other Rights
	Options	Options	Unearned	Exercise	Option	That have	That have	That have	That have
	(#)	(#)	Options	Price	Expiration	not vested	not vested	not vested	not vested
Name	Exercisable	Unexcercisable	(#)	($)	Date	(#)	($)	(#)	($)
Marc Urbach	25000	75,000		$ 1.00	3/13/2018

			Amount of			Percent of
			Beneficial			Beneficial
		Name of Beneficial Owner	Ownership (1)			Ownership (1)
(2	)	Clive Ng		26,002,915	(3)		51.4	%
(4	)	Marc Urbach		50,000			0.1	%
(5	)	Pu Yue		0			0.0	%
(6	)	David Zale		100,000	(6)		0.2	%
(7	)	James Cassano		25,000			0.0	%
(8	)	Jonas Grossman		352,375	(9)		0.7	%
		Other Persons (Non Executives etc.)
(10	)	Mark L. Baum, Esq.		3,000,000	(10)		5.9	%
		Oliveira Capital, LLC		3,026,649			6.0	%
		All Directors and Executive Officers		26,530,290			52.4	%

Exhibit No.		Description
2.1		Share Exchange Agreement, dated as of January 23, 2007, by and among the Company, China Broadband, Ltd. and its shareholders.* [incorporated by reference to Exhibit 2.1 to the Company’s Annual Report on Form 10-KSB filed May 25, 2007]

3.1		Articles of Incorporation ~~filed~~of the Company, as ~~an exhibit~~amended to ~~our Current Report on Form 8-K filed with the Commission on January 16, 2004 and incorporated herein by reference.~~date.*

3.2		~~Articles~~Bylaws of ~~Amendment~~the Company, as amended to ~~Articles of Incorporation filed as an exhibit to our Quarterly Report on Form 10-QSB filed with the Commission on September 18, 2006 and incorporated herein by reference.~~date.*

~~3.3~~		Articles of Amendment to Articles of Incorporation changing name to “China Broadband, Inc.” as filed with the State of Nevada as of May 4, 2007, incorporated by reference from our Definitive Information Statement on Schedule 14C filed with the Commission on April 12, 2007.

~~3.4~~		~~Bylaws filed as an exhibit to Amendment No. 2 to our Registration Statement on Form 10 filed with the SEC on April 6, 1992.~~
4.1		~~Subscription~~Form of Note Purchase Agreement, dated ~~as of January 11, 2008, between China Broadband, Inc.,~~June 30, 2009, among the Company and ~~various subscribers, with respect to private issuance of aggregate of $4,971,250 principal amount of 5% Convertible Promissory Notes and 6,628,333 Class A Warrants. (Incorporated~~certain investors. [Incorporated by reference ~~from~~to Exhibit 4.1 to the Company’s Current Report on Form 8-K ~~dated January 11, 2008)~~filed on July 6, 2009]

4.2		Form of 5% Convertible Promissory Note, issued ~~to investors, convertible at $.75 per share and payable on January 11, 2013. (Incorporated~~as of June 30, 2009. [Incorporated by reference ~~from~~to Exhibit 4.2 to the Company’s Current Report on Form 8-K ~~dated January 11, 2008)~~filed on July 6, 2009]

4.3		Form of 5% Convertible Promissory Note, issued ~~to investors, convertible at $.75 per share and payable on~~as of January 11, ~~2013. (Incorporated~~2008. [Incorporated by reference ~~from~~to Exhibit 4.2 to the Company’s Current Report on Form 8-K ~~dated~~filed on January ~~11, 2008)~~
~~10.1~~		Form of Subscription Agreement by and among the Company and the investors named on the signature pages thereto, incorporated by reference from the Corporation’s Current Report on Form 8-K, dated January 23, 2007.17, 2008]

~~10.2~~4.4		Form of ~~Registration Rights Agreement dated~~Class A Warrant, issued as of January ~~23, 2007, as amended, by and among the Company and the investors named on the signature pages thereto, incorporated~~11, 2008. [Incorporated by reference ~~from~~to Exhibit 10.5 to the ~~Corporation’s~~Company’s Current Report on Form 8-K ~~dated~~filed on January ~~23, 2007.~~17, 2008]

4.5		Form of Broker’s Common Stock Warrant, issued as of January 11, 2008. [Incorporated by reference to Exhibit 10.6 to the Company’s Current Report on Form 8-K filed on January 17, 2008]

4.6		Form of Warrant Amendment, dated March 2008 [Incorporated by reference to Exhibit 10.3 to the Company’s Current Report on Form 8-K filed on May 8, 2008]

4.7		Form of 7% Convertible Promissory Note issued by China Broadband, Ltd. and assumed by the ~~Company, incorporated~~Company. [incorporated by reference ~~from~~to Exhibit 4.2 to the ~~Corporation’s~~Company’s Current Report on Form 8-K ~~dated~~filed March 20, 2007]

4.8		Form of Warrant, issued as of January 23, 2007. [incorporated by reference to Exhibit 10.4 to the Company’s Current Report on Form 8-K filed March 20, 2007]

4.9		Form of Warrant, issued as of January 23, 2007 to Maxim Financial Corporation. [incorporated by reference to Exhibit 10.5 to the Company’s Current Report on Form 8-K filed March 20, 2007]

4.10		Form of Warrant, issued as of January 23, 2007 to BCGU, LLC. [incorporated by reference to Exhibit 10.10 to the Company’s Annual Report on Form 10-KSB filed May 25, 2007]

4.11		Form of Registration Rights Agreement, dated as of January 23, 2007 [incorporated by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K filed March 20, 2007]

10.1		Form of Stock Purchase Agreement, dated as of June 30, 2009, among the Company and certain investors [Incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed on July 6, 2009]

10.2		Form of Waiver Letter, dated as of June 30, 2009, between the Company and certain existing note holders [Incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on July 6, 2009]

10.3		Form of Subscription Agreement, dated as of January 11, 2008, between the Company and certain investors. [Incorporated by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K filed on January 17, 2008]

10.4		Form of ~~Warrant~~Funds Escrow Agreement, dated ~~as of~~ January ~~23, 2007, exercisable at $2.00 per share, issued~~11, 2008, by and among the Company, ~~to investors, incorporated~~Grushko and Mittman, P.C., and investors. [Incorporated by reference ~~from~~to Exhibit 10.4 to the ~~Corporation’s~~Company’s Current Report on Form 8-K ~~dated~~filed on January ~~23, 2007.~~17, 2008]

10.5		Form of Consulting Warrant issued to issued by the Company to Maxim Financial Corporation, exercisable at $.60 per share, incorporated by reference from the Corporation’s Current Report on Form 8-K, dated January 23, 2007.

~~10.6~~		Cooperation Agreement dated as of December 26, 2006 by and between China Broadband, Ltd. and Jianan Guangdian Jiahe Digital Television Co., Ltd., incorporated by reference from the Corporation’s Current Report on Form 8-K, dated January 23, 2007.

~~10.7~~		~~Employment Agreement dated as of January 24, 2007 by and between the Company and Clive Ng, incorporated by reference from the Corporation’s Current Report on Form 8-K, dated January 23, 2007.~~

~~10.8~~		~~Employment Agreement dated as of January 24, 2007 by and between the Company and Jiang Bing, incorporated by reference from the Corporation’s Current Report on Form 8-K, dated January 23, 2007.~~

~~10.9~~		~~Employment Agreement dated as of January 24, 2007 by and between the Company and Pu Yue, incorporated by reference from the Corporation’s Current Report on Form 8-K, dated January 23, 2007.~~
~~10.10~~		Form of Common Stock Purchase Warrant exercisable at $0.60 issued by the Company to BCGU, LLC in connection with Share Exchange, incorporated from the Corporation’s Current.*


~~10.11~~		~~Exclusive Service Agreement dated December 2006.~~

~~10.12~~		Settlement Agreement, dated January 11, 2008, by and among ~~China Broadband, Inc.,~~the Company, China Broadband Ltd., Stephen Cherner, Maxim Financial Corporation, Mark L. Baum, BCGU, LLC, Mark I Lev, Wellfleet Partners, Inc., Pu Yue, Clive Ng, Chardan Capital Markets, LLC, Jaguar Acquisition Corporation, and China Cablecom Holdings, Ltd. ~~(Incorporated~~[Incorporated by reference ~~from~~to Exhibit 10.1 to the ~~Corporation’s~~Company’s Current Report on Form 8-K ~~dated~~filed on January ~~11, 2008)~~17, 2008]

~~10.13~~10.6		~~Employment~~Form of Subscription and Release Agreement, ~~Amendment,~~ dated ~~Janaury 11,~~March 2008 ~~amending employment agreement of Clive Ng. (Incorporated~~[Incorporated by reference ~~from~~to Exhibit 10.1 to the ~~Corporation’s~~Company’s Current Report on Form 8-K ~~dated January 11, 2008)~~filed on May 8, 2008]

~~10.14~~10.7		~~Employment~~Form of Release Agreement, ~~Amendment,~~ dated ~~Janaury 11,~~March 2008 ~~amending employment agreement of Pu Yue. (Incorporated~~[Incorporated by reference ~~from~~to Exhibit 10.2 to the ~~Corporation’s~~Company’s Current Report on Form 8-K ~~dated January 11, 2008)~~filed on May 8, 2008]

~~10.15~~10.8		~~Funds Escrow~~Form of Subscription Agreement, dated January 23, 2007, by and among the Company ~~Grushko~~ and ~~Mittman, P.C., and~~certain investors. ~~(Incorporated~~[incorporated by reference ~~from~~to Exhibit 10.3 to the ~~Corporation’s~~Company’s Current Report on Form 8-K ~~dated January 11, 2008)~~filed March 20, 2007]

~~10.16~~10.9		~~Form~~Cooperation Agreement dated as of ~~Class A Warrants issued to investors, exercisable at $.60 per share~~December 26, 2006 between China Broadband, Ltd. and ~~expiring on June 11, 2013. (Incorporated~~Jianan Guangdian Jiahe Digital Television Co., Ltd. [incorporated by reference ~~from~~to Exhibit 10.1 to the ~~Corporation’s~~Company’s Current Report on Form 8-K ~~dated January 11, 2008)~~filed March 20, 2007]

~~10.17~~10.10		~~Broker Warrant issued to Chardan Capital Markets, LLC, to purchase 1,131,667 shares of Common Stock, at an exercise price of $.50 per share, expiring on June 11, 2013. (Incorporated~~Exclusive Service Agreement, dated December, 2006, by and among Beijing China Broadband Network Technology Co., Ltd., Jinan Guangdian Jiahe Digital Television Co., Ltd. and Jinan Broadcast &Televison Information Network Center. [incorporated by reference ~~from~~to Exhibit 10.11 to the ~~Corporation’s~~Company’s Current Report on Form 8-K ~~dated January~~filed June 11, ~~2008)~~2007]

~~10.18~~10.11		Cooperation Agreement, dated March 7, 2008, by and among Ji’Nan Zhongkuan Dian Guang Information Technology Co., Shandong Broadcast & TV Weekly Press and Modern Movie & TV Biweekly Press. ~~(Incorporated~~[incorporated by reference ~~from~~to Exhibit 10.1 to the ~~Corporation’s~~Company’s Current Report on Form 8-K filed March 13, 2008]

10.12		Share Issuance Agreement, dated April 7, 2009 between the Company, China Broadband, Ltd., Waanshi Wangjing Media Technologies (Beijing) Co., Ltd. and its shareholders. [incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed April 14, 2009]

10.13		Loan Agreement, dated as of April 7, 2009, between China Broadband, Ltd. and Wangjing Media Technologies (Beijing) Co., Ltd..*

10.14		Equity Option Agreement, dated as of April 7, 2009, between China Broadband, Ltd. and Wangjing Media Technologies (Beijing) Co., Ltd.*