~~changes in interest rates;~~

~~new services or significant contracts and acquisitions;~~

~~variations in quarterly operating results;~~

~~change in financial estimates by securities analysts;~~

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

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

~~general economic and other national and international conditions.~~

The implementation of the new PRC employment contract law and increases in the labor costs in China may hurt our business and profitability.

We are primarily a service provider. A new employment contract law became effective on January 1, 2008 in China. It imposes more stringent requirements on employers in relation to entry into fixed-term employment contracts, recruitment of temporary employees and dismissal of employees. In addition, under the newly promulgated Regulations on Paid Annual Leave for Employees, which also became effective on January 1, 2008, employees who have worked continuously for more than one year are entitled to paid vacation ranging from 5 to 15 days, depending on the length of the employee’s service. Employees who waive such vacation entitlements at the request of the employer will be compensated for three times their normal daily salaries for each vacation day so waived. As a result of the new law and regulations, our labor costs may increase. There is no assurance that disputes, work stoppages or strikes will not arise in the future. Increases in the labor costs or future disputes with our employees could damage our business, financial condition or operating results.

Under the Enterprise Income Tax Law, we may be classified as a “resident enterprise” of China. Such classification will likely result in unfavorable tax consequences to us and our non-PRC stockholders.

China passed a new Enterprise Income Tax Law, or the EIT Law, and its implementing rules, both of which became effective on January 1, 2008. Under the EIT Law, an enterprise established outside of China with “de facto management bodies” within China is considered a “resident enterprise,” meaning that it can be treated in a manner similar to a Chinese enterprise for enterprise income tax purposes. The implementing rules of the EIT Law define de facto management as “substantial and overall management and control over the production and operations, personnel, accounting, and properties” of the enterprise.

On April 22, 2009, the State Administration of Taxation issued the Notice Concerning Relevant Issues Regarding Cognizance of Chinese Investment Controlled Enterprises Incorporated Offshore as Resident Enterprises pursuant to Criteria of de facto Management Bodies, or the Notice, further interpreting the application of the EIT Law and its implementation non-Chinese enterprise or group controlled offshore entities. Pursuant to the Notice, an enterprise incorporated in an offshore jurisdiction and controlled by a Chinese enterprise or group will be classified as a “non-domestically incorporated resident enterprise” if (i) its senior management in charge of daily operations reside or perform their duties mainly in China; (ii) its financial or personnel decisions are made or approved by bodies or persons in China; (iii) its substantial assets and properties, accounting books, corporate chops, board and shareholder minutes are kept in China; and (iv) at least half of its directors with voting rights or senior management often resident in China. A resident enterprise would be subject to an enterprise income tax rate of 25% on its worldwide income and must pay a withholding tax at a rate of 10% when paying dividends to its non-PRC stockholders. However, it remains unclear as to whether the Notice is applicable to an offshore enterprise incorporated by a Chinese natural person. Nor are detailed measures on imposition of tax from non-domestically incorporated resident enterprises are available. Therefore, it is unclear how tax authorities will determine tax residency based on the facts of each case.

We may be deemed to be a resident enterprise by Chinese tax authorities. If the PRC tax authorities determine that we are a “resident enterprise” for PRC enterprise income tax purposes, a number of unfavorable PRC tax consequences could follow. First, we may be subject to the enterprise income tax at a rate of 25% on our worldwide taxable income as well as PRC enterprise income tax reporting obligations. In our case, this would mean that income such as interest on financing proceeds and non-China source income would be subject to PRC enterprise income tax at a rate of 25%. Second, although under the EIT Law and its implementing rules dividends paid to us from our PRC subsidiaries would qualify as “tax-exempt income,” we cannot guarantee that such dividends will not be subject to a 10% withholding tax, as the PRC foreign exchange control authorities, which enforce the withholding tax, have not yet issued guidance with respect to the processing of outbound remittances to entities that are treated as resident enterprises for PRC enterprise income tax purposes. Finally, it is possible that future guidance issued with respect to the new “resident enterprise” classification could result in a situation in which a 10% withholding tax is imposed on dividends we pay to our non-PRC shareholders and with respect to gains derived by our non-PRC shareholders from transferring our shares. We are actively monitoring the possibility of “resident enterprise” treatment for the 2010 tax year and are evaluating appropriate organizational changes to avoid this treatment, to the extent possible.

If we were treated as a “resident enterprise” by PRC tax authorities, we would be subject to taxation in both the U.S. and China, and our PRC tax may not be creditable against our U.S. tax.

RISKS RELATED TO THE MARKET FOR OUR STOCK GENERALLY

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

~~Our common stock is currently~~ quoted on the OTC Bulletin Board which may have an unfavorable impact on our stock price and ~~trades~~liquidity.

Our common stock is quoted on the OTC Bulletin Board. The OTC Bulletin Board is a significantly more limited market than the New York Stock Exchange or Nasdaq system. The quotation of our shares on the OTC Bulletin Board may result in a less liquid market available for existing and potential stockholders to trade shares of our common stock, could depress the trading price of our common stock and could have a long-term adverse impact on our ability to raise capital in the future.

We have a significant amount of convertible debt and warrants outstanding, all of which have anti dilution provisions. If the notes are converted or warrants exercised, or if the conversion prices are adjusted downward as a result of a stock issuance at our current market rates, you will suffer immediate and substantial dilution to your common stock.

Currently the following securities with anti-dilution provisions are outstanding:

$5,276,103 principle amount of convertible debt, convertible at $.20 and $.25 per share into 25,980,515 shares of common stock,

6,628,333 Common Stock Purchase Warrants exercisable at $0.60 per share,

1,131,667 Common Stock Purchase Warrants execrable at $0.50 per share, issued to Chardan Capital.

In addition, it is not likely that we will be able to raise convertible debt or equity financing without issuing shares at or below ~~$5.00 per share;~~market rates, which, in addition to obvious dilution to existing shareholders, would reduce the conversion and exercise prices of the above securities causing further dilution to shareholders. While our existing noteholders and warrant holders have waived certain portions of their anti dilution provisions for this past years’ financing of notes and warrants, no assurance can be made that they will do so in the future.

Moreover, anti-dilution provisions in warrants have an additional adverse effect on the Company in that we would be required to reflect the value of such warrants as a potential liability to the Company. No assurance can be made, therefore, that we will be able to raise capital, or, if we do, that the same will not have a material adverse effect on our capitalization or to our balance sheet.

The market price of our common stock is ~~considered~~volatile, leading to bethe possibility of its value being depressed at a ~~“penny stock”~~time when you may want to sell your holdings.

The market price of our common stock is volatile, and ~~as such,~~this volatility may continue. Numerous factors, many of which are beyond our control, may cause the market price of our common stock to fluctuate significantly. In addition to market and industry factors, the price and trading volume for our common stock may be ~~further limited~~highly volatile for specific business reasons. Factors such as variations in our revenues, earnings and cash flow, announcements of new investments, cooperation arrangements or acquisitions, and fluctuations in market prices for our products could cause the market price for our shares to change substantially.

Securities class action litigation is often instituted against companies following periods of volatility in their stock price. This type of litigation could result in substantial costs to us and divert our management’s attention and resources.

Moreover, the trading market for our common stock will be influenced by ~~certain SEC rules applicable~~research or reports that industry or securities analysts publish about us or our business. If one or more analysts who cover us downgrade our common stock, the market price for our common stock would likely decline. If one or more of these analysts cease coverage of us or fail to ~~penny stocks. To~~regularly publish reports on us, we could lose visibility in the ~~extent~~financial markets, which, in turn, could cause the market price for our common stock or trading volume to decline.

Furthermore, securities markets may from time to time experience significant price and volume fluctuations for reasons unrelated to operating performance of particular companies. These market fluctuations may adversely affect the price of our common stock ~~remains below~~and other interests in our company at a time when you want to sell your interest in us.

We may be subject to penny stock regulations and restrictions and you may have difficulty selling shares of our common stock.

The SEC has adopted regulations which generally define so-called “penny stocks” to be an equity security that has a market price less than $5.00 per share or ~~we have net tangible assets~~an exercise price of ~~$2,000,000 or~~ less ~~our common shares will be~~than $5.00 per share, subject to certain exemptions. If our common stock becomes a “penny stock” ~~rules promulgated by~~, we may become subject to Rule 15g-9 under the ~~SEC. Those rules impose certain~~Exchange Act, or the Penny Stock Rule. This rule imposes additional sales practice requirements on ~~brokers who~~broker-dealers that sell ~~penny stock~~such securities to persons other than established customers and ~~accredited investors.~~“accredited investors” (generally, individuals with a net worth in excess of $1,000,000 or annual incomes exceeding $200,000, or $300,000 together with their spouses). For transactions covered by ~~the penny stock rules, the broker~~Rule 15g-9, a broker-dealer must make a special suitability determination for the purchaser and ~~receive~~have received the ~~purchaser’s~~purchaser's written consent to the transaction prior to ~~the~~ sale. Furthermore, the penny stock rules generally require, among other things, that brokers engaged in secondary trading of penny stocks provide customers with written disclosure documents, monthly statements of the market value of penny stocks, disclosure of the bid and asked prices, disclosure of the compensation to the brokerage firm and disclosure of the sales person working for the brokerage firm. These rules and regulations adverselyAs a result, this rule may affect the ability of ~~brokers~~broker-dealers to sell our ~~common shares~~securities and ~~limit~~may affect the ~~liquidity~~ability of purchasers to sell any of our securities in the secondary market.

For any transaction involving a penny stock, unless exempt, the rules require delivery, prior to any transaction in penny stock, of a disclosure schedule prepared by the SEC relating to the penny stock market. Disclosure is also required to be made about sales commissions payable to both the broker-dealer and the registered representative and current quotations for the securities. Finally, monthly statements are required to be sent disclosing recent price information for the penny stock held in the account and information on the limited market in penny stock.

There can be no assurance that our common stock will qualify for exemption from the Penny Stock Rule. In any event, even if our common stock were exempt from the Penny Stock Rule, we would remain subject to Section 15(b)(6) of the Exchange Act, which gives the SEC the authority to restrict any person from participating in a distribution of penny stock, if the SEC finds that such a restriction would be in the public interest.

Certain of our stockholders hold a significant percentage of our outstanding voting securities.

Mr. Clive Ng, our Chairman, is the beneficial owner of approximately 38% of our outstanding voting securities. As a result, he possesses significant influence and can elect a majority of our board of directors and authorize or prevent proposed significant corporate transactions. His ownership and control may also have the effect of delaying or preventing a future change in control, impeding a merger, consolidation, takeover or other business combination or discourage a potential acquirer from making a tender offer.

Provisions in our articles of incorporation and bylaws or Nevada law might discourage, delay or prevent a change of control of us or changes in our management and, therefore depress the trading price of the common stock.

Our articles of incorporation authorizes our board of directors to issue up to 5,000,000 shares of preferred stock. The preferred stock may be issued in one or more series, the terms of which may be determined at the time of issuance by the board of directors without further action by the stockholders. These terms may include preferences as to dividends and liquidation, conversion rights, redemption rights and sinking fund provisions. The issuance of any preferred stock could diminish the rights of holders of our common stock, and therefore could reduce the value of such common stock. In addition, specific rights granted to future holders of preferred stock could be used to restrict our ability to merge with, or sell assets to, a third party. The ability of our board of directors to issue preferred stock could make it more difficult, delay, discourage, prevent or make it more costly to acquire or effect a change-in-control, which in turn could prevent our stockholders from recognizing a gain in the event that a favorable offer is extended and could materially and negatively affect the market price of our common stock.

In addition, Nevada corporate law and our articles of incorporation and bylaws contain certain other provisions that could discourage, delay or prevent a change in control of our Company or changes in its management that our stockholders may deem advantageous. These provisions:

deny holders of our common stock cumulative voting rights in the election of directors, meaning that stockholders owning a majority of our outstanding shares of common stock will be able to elect all of our directors;

require any stockholder wishing to properly bring a matter before a meeting of stockholders to comply with specified procedural and advance notice requirements; and

allow any vacancy on the board of directors, however the vacancy occurs, to be filled by the directors.

We do not intend to pay dividends infor the ~~near future, if at all.~~foreseeable future.

~~We do not~~For the foreseeable future, we intend to ~~pay~~retain any ~~dividends~~earnings to finance the development and expansion of our business, and we do not ~~foresee making~~anticipate paying any cash ~~distributions~~dividends on our common stock. Accordingly, investors must be prepared to rely on sales of their common stock after price appreciation to earn an investment return, which may never occur. Investors seeking cash dividends should not purchase our common stock. Any determination to pay dividends in the ~~manner~~future will be made at the discretion of ~~a dividend or otherwise. If we do want to liquidate or pay dividends, such liquidation or payment is subject to PRC law. Our~~our board of directors ~~presently intends to follow a policy~~and will depend on our results of ~~retaining earnings, if any.~~operations, financial condition, contractual restrictions, restrictions imposed by applicable law and other factors our board deems relevant.

Shares issuable upon conversion of convertible promissory notes, warrants or otherwise issued to investors are eligible for re-sale under Rule 144 in 2008. If these shares are sold it would exert downward pressure on the price of our stock.

ITEM 1B.

UNRESOLVED STAFF COMMENTS.

As a result of the January 2007 equity financing, the Share Exchange and the transfer of over 7,000,000 shares by Mr. Ng to certain unaffiliated investors in our January 2008 convertible note offering, a substantial number of shares may become eligible for resale pursuant to Rule 144 of the Securities Act. The sale of these securities may have an adverse effect on our stock price.Not Applicable.

~~Item 2. Properties.~~

ITEM 2.

PROPERTIES.

Since the completion of ~~the Share Exchange on January 23, 2007,~~our reverse acquisition of Broadband Cayman, our principal executive offices in the United States has been and ~~continue~~continues to be located at 1900 Ninth Street, 3rd Floor Boulder, Colorado 80302, under a lease with Maxim Financial Corporation, a consultant to the Company. This space was occupied previously by ~~China~~ Broadband Cayman since its inception in mid 2006. This lease is for 1,000 square feet of office space and shared administrative services. The monthly lease rate is $2,000 per month. This lease may be terminated for any reason by Maxim Financial Corporation on 30 days notice.

Pursuant to our consulting agreement with it, Maxim Financial Corporation has waived its past fees owed by ~~China~~ Broadband Cayman since July of 2006 and all future rental fees of the Company through December 31, 2007. In addition, Maxim Financial Corporation has agreed to defer all monthly rental payments beginning January 2008 until ~~the Company’s~~our next capital raise subsequent to January 2008. We ~~have~~did not ~~paid~~pay any ~~rents~~rent to Maxim Financial Corporation in 2008 or 2009, but have accrued ~~$24,000~~$48,000 related to this agreement.

The principal address ~~of our operating business~~ of Jinan Broadband is c/o Jinan Guangdian Jiahe Digital TV Co. Ltd., No. 32, Jing Shi Yi Road, Jinan Shandong 250014, Tel: (86531)~~-85652255 87077886 Fax: (86531)-82953142. The Company~~-85652255. We paid approximately ~~$73,000 (500,000 RMB)~~$81,000 for rent at its facilities in Jinan in ~~2008.~~2009.

The principal address of ~~our~~ Shandong ~~Media operating business~~Publishing is Qing Nian Dong Lu No. 26, Lixia District, Jinan City. ~~The Company~~We paid approximately ~~$47,000~~$66,000 for ~~six months~~ rent in ~~2008.~~2009.

The principal address of AdNet Media was Room 280, Suyuan Office Building, Friendship Hotel, No.1 South Street, Zhongguancum, Beijing, China. We paid approximately $32,000 for rent in 2009.

We believe that all our properties have been adequately maintained, are generally in good condition, and are suitable and adequate for our business.

ITEM 3.

LEGAL PROCEEDINGS.

~~Item 3. Legal Proceedings.~~From time to time, we may become involved in various lawsuits and legal proceedings which arise in the ordinary course of business. However, litigation is subject to inherent uncertainties, and an adverse result in these or other matters may arise from time to time that may harm our business. We are currently not aware of any such legal proceedings or claims that we believe will have a material adverse affect on our business, financial condition or operating results.

~~The Company is not a party to any legal proceedings.~~

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

~~No matters were submitted to a vote of security holders during the fourth quarter of the year ended December 31, 2008.~~

ITEM 4.

SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

None.

PART II

ITEM 5.

MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES.

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

~~Effective as of October 16, 2007,~~Our common stock is quoted under 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~~Board. Trading of our ~~four letter identifier. Trading in the~~ common stock ~~has been~~is sometimes limited and ~~sporadic due to~~sporadic. The following table sets forth, for the ~~limited market following~~periods indicated, the high and ~~limited number~~low closing prices 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, theseour common stock. These prices reflect inter-dealer prices, without retail mark-up, mark-down or commission, and may not ~~necessarily reflect~~represent actual transactions. As

	Closing Bid Prices(1)
	High		Low
Year Ended December 31, 2009
1st Quarter	$	0.24	$	0.02
2nd Quarter		0.25		0.10
3rd Quarter		0.20		0.15
4th Quarter		0.25		0.05

Year Ended December 31, 2008
1st Quarter	$	0.02	$	0.02
2nd Quarter		0.10		0.10
3rd Quarter		0.50		0.50
4th Quarter		1.15		0.51

(1) The above table sets forth the range of ~~March 20, 2009 the~~high and low closing ~~price for~~bid prices per share of our common stock as ~~quoted on~~reported by www.quotemedia.com for the ~~OTC Bulletin Board was $0.15.~~periods indicated.

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

Approximate Number of Holders of Our Common Stock

As of ~~March 20, 2009~~April 15, 2010, there were ~~307~~approximately 313 holders of record ~~holders~~of our common stock. This number excludes the shares of our common stock ~~and 50,585,455 shares of common~~beneficially owned by stockholders holding 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~~trading accounts through DTC, 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.under nominee security position listings.

Dividends

We have ~~not~~never declared or paid a cash dividend. Any future decisions regarding dividends will be made by our board of directors. We currently intend to retain and use any future earnings for the development and expansion of our ~~stockholders during this or our two most recently completed fiscal years. We~~business and do not anticipate ~~that we will~~paying any cash dividends in the foreseeable future. Our board of directors has complete discretion on whether to pay dividends, ~~any time in~~subject to the ~~near~~approval of our stockholders. Even if our board of directors decides to pay dividends, the form, frequency and amount will depend upon our future operations and ~~anticipate reinvesting revenues, in~~earnings, capital requirements and surplus, general financial condition, contractual restrictions and other factors that the ~~operations~~board of ~~the Company and in additional acquisitions.~~directors may deem relevant. In addition, ~~in order for us~~our ability to declare and pay dividends ~~we would be~~is dependant on ~~receiving payments from~~ our ~~operating~~ability to declare dividends and profits in our PRC subsidiaries. PRC rules greatly restrict and limit the ability of our subsidiaries to declare dividends to our parent which, in ~~the PRC. As these are PRC companies, we would be required~~addition to ~~obtain various levels of regulatory approval prior~~restricting our cash flow, limits our ability to ~~paying such dividends or making distributions up to the parent.~~pay dividends.

Securities Authorized for Issuance Under Equity Compensation ~~Plan Information~~Plans

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-
See Item 12, “Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters — Securities Authorized for Issuance Under Equity Compensation Plans.”

Recent Sales of Unregistered Securities

~~(1)~~

We dohave not ~~have~~sold any equity ~~compensation plans approved by~~securities during the ~~security holders.~~fiscal year ended December 31, 2009 that were not previously disclosed in a quarterly report on Form 10-Q or a current report on Form 8-K that was filed during the 2009 fiscal year.

~~(2) Effective as~~Purchases of ~~the March 13, 2008, the board~~Equity Securities

No repurchases 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’sour common stock ~~may be issued under~~were made during the ~~Plan. The Plan may also be administered by an independent committee~~fourth quarter of the board of directors. Currently, only 317,500 options were granted under the Plan which were issued on March 13, 2008, of which 100,000 were granted to Mr. Urbach, exercisable at $1.00 per share, vesting over four years as per his employment agreement with the remaining 217,500 granted to other directors in June of 2008, exercisable at $.45 per share, exercisable over 3 years. As of December 31, 2008, no equity compensation plans have been approved by the security holders.2009.

~~Item 6. Selected Financial Data.~~

ITEM 6.

SELECTED FINANCIAL DATA.

Not ~~applicable.~~

Applicable.

2021

~~Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations.~~

ITEM 7.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

The following management’s discussion and analysis should be read in conjunction with our financial statements and the ~~Consolidated Financial Statements and~~ notes thereto ~~included~~and the other financial information appearing elsewhere in this ~~Form 10-K. All~~report. In addition to historical information, ~~presented herein is based on~~ the ~~Company’s fiscal calendar. Unless otherwise stated, references in this report to particular years or quarters refer to the Company’s fiscal years ended in December and the associated quarters of~~following discussion contains certain forward-looking information. See “Special Note Regarding Forward Looking Statements” above for certain information concerning those ~~fiscal years. The Company assumes no obligation to revise or update any forward-looking statements for any reason, except as required by law.~~

~~Background~~forward looking statements.

Overview

We ~~own and~~ operate in the media segment through our ~~indirect~~Chinese VIE operating subsidiaries, ~~in the People’s Republic of China (“PRC”),~~(1) a cable broadband business based in the Jinan region of China ~~(Jinan Broadband)~~ and (2) a television ~~programming~~program guide, ~~publication~~newspaper and magazine publishing business ~~joint venture (Shandong Media)~~based in the Shandong ~~Province~~region of ~~China (see Item 1 above). More recently, we acquired an~~China. In addition, AdNet holds a business license to operate in 28 provinces and provide internet ~~café~~ content ~~provider and~~ advertising ~~business~~in cafés in the ~~PRC (AdNet) (See “Recent Developments” in Item 1 above). Our principal activity is providing~~PRC.

Through our subsidiary Jinan Broadband, we provide cable and wireless broadband services, principally internet services, Internet Protocol Point wholesale services, related network equipment rental and ~~print~~sales, and fiber network construction and maintenance. Jinan Broadband’s revenue consists primarily of sales to our PRC based ~~media~~Internet consumers, cable modem consumers, business customers and ~~television programming guide~~other internet and cable services.

We operate our publishing business, which 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, and the provision of audio value added communication services, through Shandong Publishing, our joint venture company. Shandong Media’s revenue consists primarily of sales of publications and advertising revenues.

Our subsidiary AdNet, which was acquired during the first half of 2009, holds an Internet Content Provider (“ICP”) license with rights to provide delivery of multimedia advertising content to internet cafés in the ~~media segment. All references~~PRC. AdNet is licensed to ~~dollar amounts~~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.

As previously reported, management has opted to limit its expenses in respect of AdNet’s business and has reduced AdNet’s full and part time staff, all of which were based in the PRC, were reduced from 20 persons to 2 full time employees. Nonetheless, we are maintaining AdNet’s ICP and other licenses, servers and infrastructure, as well as all of its intellectual property, all of which we intend on using both for AdNet and, in connection with other businesses that we contemplate acquiring or entering into, which would require similar technology and infrastructure.

Recent Developments

On March 9, 2010, China Broadband Cayman entered into a note purchase agreement and a non-binding Letter of Intent, or the LOI with Sinotop Group Ltd., a Hong Kong corporation, or Sinotop Hong Kong. Through a series of contractual arrangements referred to herein as “VIE Contracts”, Sinotop Hong Kong controls Beijing Sino Top Scope Technology Co., Ltd., or Sinotop Beijing. Sinotop Beijing, a corporation established in the PRC is, in turn, a party to a joint venture with two other PRC companies to provide integrated value-added service solutions for the delivery of pay-per-view (“PPV”), video-on-demand (“VOD”), and enhanced premium content for cable providers.

The LOI summarizes the proposed terms of the acquisition by CB Cayman of 100% of the outstanding capital stock of Sinotop Hong Kong from its sole stockholder in consideration for a percentage of China Broadband to be determined in the definitive agreement. Among other customary closing conditions, the acquisition is contingent upon the (1) the drafting and negotiation of definitive agreements that cover the matters discussed in the LOI, (2) the funding of the Note (as defined below), which ~~relate~~has already occurred, (3) the contribution by CB Cayman of at least US$5,000,000 to the capital of Sinotop Hong Kong (or the purchase by CB Cayman of newly issued shares of Sinotop Hong Kong in consideration for the same amount), and (4) the absence of any debts, obligations or encumbrances on the equity or assets of Sinotop Hong Kong and the WFOE other than the Note and the VIE Contracts. The LOI contains a binding exclusivity provision that prohibits Sinotop Hong Kong and Sinotop Hong Kong’s sole stockholder from soliciting, initiating, entertaining, participating in any discussions or negotiations concerning, or making or accepting any offer or proposed transaction with any third party with regard to, any of the transactions contemplated by the LOI or any similar transaction. This transaction has not been consummated yet and we are dependent on our ability to raise capital in order to complete this transaction.

Pursuant to the Note Purchase Agreement, on March 9, 2010, CB Cayman acquired a Convertible Promissory Note, or Note from Sinotop Hong Kong in consideration of CB Cayman’s loan to Sinotop Hong Kong under the Note in the amount of US$580,000 as contemplated by the LOI.

The Note accrues interest at a simple annual rate of 5% and is due on the date, or the Maturity Date that is the earlier of the fifth anniversary of the date of issuance of the Note or the day following a change of control (as described in the Note). The outstanding principal amount of the Note along with all accrued interest is convertible into common shares of Sinotop Hong Kong upon the occurrence of (1) Sinotop Hong Kong consummating a financing transaction, or Financing, resulting in aggregate gross proceeds of at least $1 million, in which case the Note would automatically be converted into ordinary shares of Sinotop Hong Kong at a price equal to 70% of the price per share paid by investors in such Financing, or (2) a change of control of Sinotop Hong Kong (as described in the Note), in which case the Note would automatically be converted into ordinary shares that represent 50% of the issued and outstanding capital stock of Sinotop Hong Kong. The outstanding principal amount of the Note and all accrued interest thereon may also be converted at the option of CB Cayman at any time after the Maturity Date or an event of default into ordinary shares of Sinotop Hong Kong representing 50% of the issued and outstanding voting capital stock of Sinotop Hong Kong. The Note may not be prepaid prior to the Maturity Date without the consent of the holder of the Note. The Note contains customary events of default.

2009 Financial Performance Highlights

The following are some financial highlights for the 2009 fiscal year:

Revenue: Revenue increased $2,081,000 or 33%, to $8,443,000 for the year ended December 31, 2009 from $6,362,000 last year.

Gross Margin: Gross margin was 33% for the year ended December 31, 2009, as compared to 41% last year.

Net Loss: Net loss attributable to shareholders increased $2,086,000, or 62%, to $5,440,000 for the year ended December 31, 2009, from $3,354,000 last year.

Fully diluted loss per share: Fully diluted loss per share was $(.09) for the year ended December 31, 2009, as compared to $(.07) last year.

Principal Factors Affecting Our Financial Performance

Our operating results are primarily affected by the following factors:

Growth in the Chinese Economy. We operate in China and derive almost all of our revenues from sales to customers in China. Economic conditions in China, therefore, affect virtually all aspects of our operations, including the demand for our products, the availability and prices of our raw materials and our other expenses. China has experienced significant economic growth, achieving a compound annual growth rate of over 10% in gross domestic product from 1996 through 2008. China is expected to experience continued growth in all areas of investment and consumption, even in the face of a global economic recession. However, China has not been entirely immune to the global economic slowdown and is experiencing a slowing of its growth rate.

PRC Economic Stimulus Plans. The PRC government has issued a policy entitled “Central Government Policy On Stimulating Domestic Consumption To Counter The Damage Result From Export Business Of The Country,” pursuant to which the PRC Central Government is dedicating approximately $580 billion to stimulate domestic consumption. Companies that are either directly or indirectly related to construction, and to the manufacture and sale of building materials, electrical household appliances and telecommunication equipment, are expected to benefit.

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. 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.

Taxation

United States

China Broadband, Inc. is subject to United States tax at a tax rate of 34%. No provision for income taxes in the United States has been made as China Broadband, Inc. had no income taxable in the United States.

Cayman Islands

Broadband Cayman was incorporated in the Cayman Islands. Under the current law of the Cayman Islands, Broadband Cayman is not subject to income or capital gains tax. In addition, dividend payments are not subject to withholding tax in the Cayman Islands.

China

Before the implementation of the EIT Law, FIEs established in the PRC, unless granted preferential tax treatments by the PRC government, were generally subject to an earned income tax, or EIT, rate of 33.0%, which included a 30.0% state income tax and a 3.0% local income tax. On March 16, 2007, the National People’s Congress of China passed the EIT Law, and on November 28, 2007, the State Council of China passed the EIT Law Implementing Rules which took effect on January 1, 2008. The EIT Law and its implementing rules impose a unified EIT of 25.0% on all domestic-invested enterprises and FIEs, unless they qualify under certain limited exceptions. Despite these changes, the EIT Law gives FIEs established before March 16, 2007, or Old FIEs, a five-year grandfather period during which they can continue to enjoy their existing preferential tax treatments. During this five-year grandfather period, the Old FIEs which enjoyed tax rates lower than 25% under the original EIT law will be subject to gradually increased EIT rates over a 5-year period until their tax rate reaches 25%. In addition, the Old FIEs that are eligible for other preferential tax treatments by the PRC government under the original EIT law are allowed to continue enjoying their preference until these preferential treatment periods expire.

In addition to the changes to the current tax structure, under the EIT Law, an enterprise established outside of China with “de facto management bodies” within China is considered a resident enterprise and will normally be subject to an EIT of 25% on its global income. The implementing rules define the term “de facto management bodies” as “an establishment that exercises, in substance, overall management and control over the production, business, personnel, accounting, etc., of a Chinese enterprise.” If the PRC tax authorities subsequently determine that we should be classified as a resident enterprise, then our organization’s global income will be subject to PRC income tax of 25%. For detailed discussion of PRC tax issues related to resident enterprise status, see Item 1A, “Risk Factors – Risks Related to Our Business – Under the Enterprise Income Tax Law, we may be classified as a “resident enterprise” of China. Such classification will likely result in unfavorable tax consequences to us and our non-PRC stockholders.”

In addition, the EIT Law and its implementing rules generally provide that a 10% withholding tax applies to China-sourced income derived by non-resident enterprises for PRC enterprise income tax purposes unless the jurisdiction of incorporation of such enterprises’ shareholder has a tax treaty with China that provides for a different withholding arrangement. We expect that such 10% withholding tax will apply to dividends paid to us by our PRC subsidiaries, but this treatment will depend on our status as a non-resident enterprise.

Our future effective income tax rate depends on various factors, such as tax legislation, the geographic composition of our pre-tax income and non-tax deductible expenses incurred. Our management carefully monitors these legal developments and will timely adjust our effective income tax rate when necessary.

Results of Operations

Year Ended December 31, 2009 Compared to Year Ended December 31, 2008

The following table sets forth key components of our results of operations for the periods indicated, in dollars and as a percentage of revenue.

	Year Ended						Amount			%
	December 31,			December 31,			Increase /			Increase /
	2009			2008			(Decrease)			(Decrease)

Revenue	$	8,443,000		$	6,362,000		$	2,081,000			33	%
Cost of revenue		5,661,000			3,741,000			1,920,000			51	%
Gross profit		2,782,000			2,621,000			161,000			6	%

Selling, general and adminstrative expenses		3,228,000			1,923,000			1,305,000			68	%
Professional fees		641,000			619,000			22,000			4	%
Depreciation and amortization		3,564,000			3,037,000			527,000			17	%

Loss from operations		(4,651,000	)		(2,958,000	)		(1,693,000	)		57	%

Interest & other income / (expense)
Settlement gain		-			1,301,000			(1,301,000	)		-100	%
Interest income		8,000			43,000			(35,000	)		-81	%
Interest expense		(363,000	)		(346,000	)		(17,000	)		5	%
Change in fair value of derivative liabilities		(512,000	)		-			(512,000	)		-
Loss on sale and write-down of securities		(15,000	)		(1,900,000	)		1,885,000			-99	%
Goodwill impairment		(1,239,000	)		-			(1,239,000	)		-
Other		(13,000	)		(10,000	)		(3,000	)		-34	%

Loss before income taxes and non-controlling interests		(6,785,000	)		(3,870,000	)		(2,915,000	)		75	%

Income tax benefit (expense)		243,000			(94,000	)		337,000			-359	%

Net loss, net of tax		(6,542,000	)		(3,964,000	)		(2,578,000	)		65	%

Plus: Net loss attributable to noncontrolling interests		1,102,000			610,000			492,000			81	%

Net loss attributable to China Broadband shareholders	$	(5,440,000	)	$	(3,354,000	)	$	(2,086,000	)		62	%

Revenues

Our revenues are generated by our operating companies in the PRC. Our revenues in the year ended December 31, 2009 include revenues primarily from our Jinan Broadband and Shandong Media companies for a full year while the revenues for the year ended 2008 include revenues for a full year from Jinan Broadband, but only 6 months revenue from Shandong Media.

Revenues for the year ended 2009 totaled $8,443,000, as compared to $6,362,000 for 2008. The increase in revenue of approximately $2,081,000, or 33%, is primarily attributable to including a full year of revenues from our Shandong Media joint venture while the 2008 period includes only 6 months of operating results.

For the year ended 2009, Jinan Broadband’s revenue consisted primarily of sales to our PRC based Internet consumers, cable modem consumers, business customers and other internet and cable services of $4,993,000, an increase of $275,000, or 5%, as compared to revenues of $4,718,000 for 2008. The increase is attributable to increases in our internet income and network leasing.

Shandong Media’s revenue consists primarily of sales of publications and advertising revenues. For the year ended 2009, revenues from the ~~PRC are converted~~Shandong Media joint venture totaled $3,443,000. By comparison, Shandong Media’s revenues of $1,644,000 for the year ended 2008 only include six months operating results.

AdNet Media’s revenue totaled $7,000 for the year ended 2009 and accounted for sales since acquisition in April 2009.

Gross Profit

Our gross profit in the year ended December 31, 2009 was $2,782,000, as compared to ~~reflect RMB exchange rates~~$2,621,000 for 2008. The increase in gross profit of approximately $161,000, or 6%, is primarily due to $473,000 decrease from our Jinan Broadband operations offset by $655,000 increase from a 12 month inclusion for 2009 compared to 6 months for 2008 of our Shandong Media joint venture. The decrease in gross profit attributable to Jinan Broadband was primarily due to charges associated with the write down of obsolete and damagedswitches and other consumer related parts held in inventory.

Gross profit as a percentage of revenue was 33% for the year ended 2009, as compared to 41% for 2008. The increase is mainly due to the ~~US dollar.~~inventory write-down from our Jinan Broadband company as well as increases in printing and supply costs at our Shandong Media company.

Selling, General and Administrative Expenses

Our selling, general and administrative expenses for the year ended December 31, 2009 increased approximately $1,305,000 to $3,228,000, as compared to $1,923,000 for the year ended 2008. The increase is primarily attributable to a 12 month inclusion for 2009 compared to 6 months for 2008 of our Shandong Media joint venture acquired in July 2008 and the inclusion of our AdNet Media acquisition in April 2009.

Salaries and personnel costs are the major component of selling, general and administrative expenses. For the year ended 2009, salaries and personnel costs accounted for 58% of our selling, general and administrative expenses. During 2009, salaries and personnel costs totaled $1,821,000, an increase of $614,000, or 51%, as compared to $1,207,000 for 2008. The increase in salaries and personnel costs is primarily attributable to the inclusion of our Shandong Media joint venture in July 2008 and the inclusion of our AdNet Media acquisition in April 2009.

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

Professional Fees

Professional fees are generally related to public company reporting and governance expenses as well as costs related to our acquisitions. Our costs for professional fees increased $22,000, or 4%, to $641,000 in the year ended December 31, 2009 from $619,000 in 2008. We expect our costs for professional services for public company reporting and corporate governance expenses to remain significant, but to decrease as a percentage of our overall revenues if we continue to acquire new entities and enter into strategic partnerships.

Depreciation and Amortization

Our depreciation expense increased $268,000, or 10%, to $3,068,000 in the year ended December 31, 2009 from $2,800,000 in 2008. The increase is mainly due to the acquisition of new equipment by our Jinan Broadband subsidiary.

Our amortization expense increased $259,000, or 109%, to $496,000 in the year ended December 31, 2009 from $237,000 in 2008. The increase is mainly due to the amortization expense related to the software technology acquired from our AdNet Media acquisition. The increase is also due to our Shandong Media intangible assets acquired in 2008

Goodwill Impairment

The Company initially recorded a $1,900,000 intangible asset related to the AdNet Acquisition. After completion of our purchase accounting for the AdNet acquisition, we recorded $1,239,000 to goodwill and $757,000 to software technology. Due to the shift of our business model to the Pay Per View and Video on Demand business, as of December 31, 2009 we temporarily suspended day to day operations of AdNet. We have maintained our licenses, contracts, technology and other assets for future use. Consequently, we recorded an impairment charge to goodwill of $1,239,000 as of December 31, 2009

Warrant Liability

Under new authoritative guidance, effective January 1, 2009, the Company was required to reclassify warrants from equity to warrant liabilities. Warrants are fair valued quarterly using the Black-Scholes Merton Model and changes in fair value are recorded to the statement of operations. We recorded a charge of $512,000 classified as change in fair value of warrants on our statement of operations for the year ended December 31, 2009.

Interest and Other Income (Expense), net

Settlement Agreement

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.~~another.

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

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

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

Net Gain	$	1,300,692

~~Issuance of Shares~~Interest income

Interest income decreased $35,000, or 81%, to $8,000 in ~~Lieu of Cash Interest Payments on Convertible Notes~~the year ended December 31, 2009 from $43,000 in 2008, primarily due to decreases in our cash and cash equivalent balances.

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”).Interest expense

~~In 2008 the Company incurred $247,000 in interest~~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~~

~~Results of Operations~~

~~The following table presents for the periods indicated the results of the Company’s operations.~~

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 %

~~Year Ended December 31, 2008 (“2008”) Compared to the Year Ended December 31, 2007 (“2007”)~~

~~Revenues~~

~~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.

~~Gross Profit~~

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~~.

~~Selling, General and Administrative Expenses~~

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.~~

~~Professional Fees~~

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

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

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.

~~Depreciation and Amortization~~

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

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.~~

~~Interest and Other Income (Expense), net~~

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

~~the net gain on the Settlement Agreement in the amount of approximately $1,301,000,~~

~~the loss on marketable equity securities write-down related to our Cablecom Holdings shares in the amount of $1,797,000,~~

~~interest expense related to the~~ 5% Convertible ~~Notes issued on January 11, 2008 in the amount of approximately $303,000,~~

~~the loss on the sale of marketable equity securities in the amount of $103,000.~~

~~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~~and June 2009. Interest expense increased $16,000, or 5%, to $362,000 in the year ended December 31, 2009 from $346,000 in 2008, primarily due to additional convertible notes issued in 2009 in the amount of approximately $305,000. Interest expense includes amortization of the original issue discount on the notes resulting from the allocation of fair value to the warrants issued in the financing.

We expect our interest expense to increase due to the convertible notes issued in 2009. Interest on the Notes compounds monthly at the annual rate of five percent (5%) ~~with the maturity date~~. The January 2008 Notes mature on January 11, 2013. The outstanding principal amount of the January 2008 Notes as of December 31, 2009 was $4,971,250, net of original issue discount of $504,661. The June 2009 Notes mature on May 27, 2010. The outstanding principal amount on the June 2009 Notes as of December 31, 2009 was approximately $305,000.

2326

~~Minority~~Loss on sale and write-down of marketable equity securities

The loss on the sale and write-down of marketable equity securities decreased $1,885,000 primarily due to the recognition of an other-than-temporary impairment of $1,797,000 in 2008 related to our Cablecom Holding shares.

Net Loss Attributable to Noncontrolling Interest

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~~In the year ended December 31, 2009, $1,056,000 of our operating ~~losses were~~loss from Jinan Broadband was allocated to Jinan Parent, ~~and $440,000 was allocated~~as compared to $588,000 in ~~2007.~~2008.

50% of the operating loss of our Shandong Media joint venture is allocated to our 50% Shandong Newspaper joint venture partner. ~~We consolidated~~In the ~~results of Shandong Media effective July 1, 2008. During 2008 $22,000 (for 6 months of operations)~~year ended December 31, 2009, $46,000 of our operating loss from Shandong Media was allocated to Shandong ~~Newspaper.~~Newspaper as compared to $22,000 in 2008. We consolidated the results of Shandong Media effective July 1, 2008.

Net Loss Attributable to Shareholders

Net loss attributable to shareholders increased $2,086,000, or 62%, to $5,440,000 in the year ended December 31, 2009 from $3,354,000 in 2008.

The following table breaks down the results of operations for ~~2008~~the years ended 2009 and ~~2007~~2008 between our operating companies and our non-operating ~~companies.~~companies.

The operating companies include Jinan Broadband, ~~and~~ Shandong Media and AdNet Media.

~~Includes a full year of~~Year 2009 includes operations ~~of our~~for 12 months, 12 months and 9 months from Jinan Broadband, ~~company in 2008 as~~Shandong Media and AdNet Media compared to ~~only 9~~2008 which includes 12 months, ~~in 2007~~6 months and 0 months, respectively

	Ø	~~Includes 6 months of operations of our Shandong Media company in 2008 as compared to no operations in 2007~~

   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 )

	Year Ended												Year Ended
	December 31, 2009												December 31, 2008
				% of												% of
				Total			Non-									Total			Non-
	Operating			Revenue			Operating			Total			Operating			Revenue			Operating			Total

Revenue	$	8,443,000					$	-		$	8,443,000		$	6,362,000					$	-		$	6,362,000
Cost of revenue		5,661,000						-			5,661,000			3,741,000						-			3,741,000
Gross profit		2,782,000			33	%		-			2,782,000			2,621,000			41	%		-			2,621,000

Selling, general and adminstrative expenses		2,402,000			28	%		826,000			3,228,000			1,100,000			17	%		823,000			1,923,000
Professional fees		45,000			1	%		596,000			641,000			25,000			0	%		594,000			619,000
Depreciation and amortization		3,071,000			36	%		493,000			3,564,000			2,801,000			44	%		236,000			3,037,000

Loss from operations		(2,736,000	)		-32	%		(1,915,000	)		(4,651,000	)		(1,305,000	)		-21	%		(1,653,000	)		(2,958,000	)

Interest & other income / (expense)
Settlement gain		-						-			-			-						1,301,000			1,301,000
Interest income		8,000						-			8,000			25,000						18,000			43,000
Interest expense		(1,000	)					(362,000	)		(363,000	)		(1,000	)					(345,000	)		(346,000	)
Change in fair value of derivative liabilities		-						(512,000	)		(512,000	)		-						-			-
Loss on sale and write-down of securities		-						(15,000	)		(15,000	)		-						(1,900,000	)		(1,900,000	)
Impairment loss		-						(1,239,000	)		(1,239,000	)		-						-			-
Other		(14,000	)					-			(14,000	)		-						(10,000	)		(10,000	)

Loss before income taxes and non-controlling interests		(2,743,000	)					(4,043,000	)		(6,786,000	)		(1,281,000	)					(2,589,000	)		(3,870,000	)

Income tax benefit (expense)		-						244,000			244,000			-						(94,000	)		(94,000	)

Net loss, net of tax		(2,743,000	)					(3,799,000	)		(6,542,000	)		(1,281,000	)					(2,683,000	)		(3,964,000	)

Plus: Net loss attributable to noncontrolling interest		1,102,000						-			1,102,000			610,000						-			610,000

Net loss attributable to China Broadband shareholders	$	(1,641,000	)				$	(3,799,000	)	$	(5,440,000	)	$	(671,000	)				$	(2,683,000	)	$	(3,354,000	)

~~In November 2008,~~ASC 820. FSP 157-4, FSP FAS 115-2 and FAS 124-2, and FSP FAS 107-1 and APB 28-1. On April 2, 2009, the FASB issued ~~EITF Issue No. 08-7, “Accounting for Defensive Intangible Assets” (“EITF 08-7”). EITF 08-7 applies~~three FSPs to ~~all acquired intangible assets in situations in which~~address concerns about measuring the acquirer does not intend to actively use the asset but intends to hold the asset to prevent its competitors from obtaining access to the asset (a defensive intangible asset). Defensive intangible assets could include assets that the acquirer will never actively use, as well as assets that will be used by the acquirer during a transition periodfair value of financial instruments when the ~~intention~~markets become inactive and quoted prices may reflect distressed transactions, recording impairment charges on investments in debt instruments, and requiring the disclosure of fair value of certain financial instruments in interim financial statements. These FSP’s were incorporated into ASC 820 under the ~~acquirer~~new codification.

The first ASC update Staff Position, FSP FAS 157-4, “Determining Whether a Market is Not Active and a Transaction is Not Distressed”, provides additional guidance to ~~discontinue~~highlight and expand on the ~~use of those assets. EITF 08-7 concluded~~factors that ~~a defensive intangible asset~~ should be ~~accounted~~considered in estimating fair value when there has been a significant decrease in market activity for a financial asset. This update became effective for the Company’s financial statements as of June 30, 2009 and it did not have a ~~separate unit~~material impact on the Company’s consolidated results of ~~accounting and should be amortized over the period that the defensive intangible asset directly or indirectly contributes to the future~~operations, cash flows or financial condition and did not require additional disclosures.

The second ASC update Staff Position, FSP FAS 115-2 and FAS 124-2, Recognition and Presentation of Other-Than-Temporary Impairments (“FSP 115-2 and FSP 124-2”), changes the ~~entity. EITF 08-7 is~~method for determining whether an other-than-temporary impairment exists for debt securities and the amount of an impairment charge to be recorded in earnings. The Company adopted this update during the second quarter of 2009 and it did not have a material impact on the Company’s consolidated results of operations, cash flows or financial condition, and did not require additional disclosures.

The third ASC update, Staff Position, FSP FAS 107-1 and APB 28-1, Interim Disclosures about Fair Value of Financial Instruments (“FSP FAS 107-1 and APB 28-1”) increases the frequency of fair value disclosures from annual only to quarterly. All three updates are effective ~~prospectively~~ for ~~intangible assets acquired on or~~interim periods ending after June 15, 2009, with the ~~beginning~~option to early adopt for interim periods ending after March 15, 2009. ASC update FSP FAS 107-1 and APB 28-1 became effective for the Company’s financial statements as of ~~the first annual reporting period beginning on or after December 15, 2008. Earlier application is not permitted.~~June 30, 2009.

ASC 260.In June 2008, the FASB issued FSP EITF 03-6-1, Determining Whether Instruments Granted in Share-Based Payment Transactions ~~are~~Are Participating Securities (“FSP EITF 03-6-1”). Under the new FASB codification this FSP was incorporated into ASC 260, Earnings Per Share (“ASC 260”). ~~This FSP provides~~ASC 260 clarifies that unvested share-based payment awards that ~~contain nonforfeitable rights~~entitle holders to receive non-forfeitable dividends or dividend equivalents (whether paid or unpaid) are considered participating securities and ~~shall~~should be included in the computation of earnings per share (“EPS”) pursuant to the two-class method. The Company does not currently have any share-based awards that would qualify as participating securities. Therefore, application of this FSP will not have an effect on the Company's financial reporting.

ASU 2009-05. The FASB issued Accounting Standards Update (“ASU”) No. 2009-05 which provides additional guidance on how companies should measure liabilities at fair value and confirmed practices that have evolved when measuring fair value such as the use of quoted prices for a liability when traded as an asset. While reaffirming the existing definition of fair value, the ASU reintroduces the concept of entry value into the determination of fair value. Entry value is the amount an entity would receive to enter into an identical liability. Under the new guidance, the fair value of a liability is not adjusted to reflect the impact of contractual restrictions that prevent its transfer. The effective date of this ASU is the first reporting period (including interim periods) after August 26, 2009. Early application is permitted for financial statements for earlier periods that have not yet been issued.

ASU 2010-06. The FASB issued ASU No. 2010-06 which provides improvements to disclosure requirements related to fair value measurements. New disclosures are required for significant transfers in and out of Level 1 and Level 2 fair value measurements, disaggregation regarding classes of assets and liabilities, valuation techniques and inputs used to measure fair value for both recurring and nonrecurring fair value measurements for Level 2 or Level 3. These disclosures are effective for the interim and annual reporting periods beginning after December 15, 2009. Additional new disclosures regarding the purchases, sales, issuances and settlements in the roll forward of activity in Level 3 fair value measurements are effective for fiscal years beginning after December 15, 2010 beginning with the first interim period. The adoption of these provisions is not expected to have an effect on the ~~Company's~~Company’s financial reporting.

ASU 2010-09. The FASB issued ASU No. 2010-09 which provides amendments to certain recognition and disclosure requirements. Previous guidance required that an entity that is an SEC filer be required to disclose the date through which subsequent events have been evaluated. This update amends the requirement of the date disclosure to alleviate potential conflicts between ASC 855-10 and the SEC’s requirements. The adoption of these provisions did not have an effect on the Company’s financial reporting.

In May 2008, the FASB issued ~~FASB Staff Position (FSP) APB 14-1,~~ASC 470-20, ~~Accounting for Convertible~~ Debt ~~That May Be Settled in Cash upon~~with Conversion ~~(Including Partial Cash Settlement)~~and Other Options (~~"FSP 14-1")~~ASC 470-20). ~~FSP 14-1~~ASC 470-20 will be effective for financial statements issued for fiscal years beginning after December 15, 2008. The FSP includes guidance that convertible debt instruments that may be settled in cash upon conversion should be separated between the liability and equity components, with each component being accounted for in a manner that will reflect the entity's nonconvertible debt borrowing rate when interest costs are recognized in subsequent periods. ~~The Company is currently assessing the potential effect~~Adoption of ~~the FSP on its financial statements.~~

~~In May 2008, the FASB issued Statement of Financial Accounting Standards No. 162,~~ ~~The Hierarchy~~ of ~~Generally Accepted Accounting Principles~~ (“FAS 162"). This Standard identifies the sources of accounting principles and the framework for selecting the principles to be used in the preparation of financial statements of nongovernmental entities that are presented in conformity with generally accepted accounting principles. FAS 162 directs the hierarchy to the entity, rather than the independent auditors, as the entity is responsible for selecting accounting principles for financial statements that are presented in conformity with generally accepted accounting principles. The Standard is effective 60 days following SEC approval of the Public Company Accounting Oversight Board amendments to remove the hierarchy of generally accepted accounting principles from the auditing standards. FAS 162 isthis statement did not ~~expected to~~ have an impact on the Company’s consolidated results of operations, cash flows or financial ~~statements~~condition.

~~In May 2008, the FASB issued Statement of Financial Accounting Standards No. 162,~~ ~~The Hierarchy~~ of ~~Generally Accepted Accounting Principles~~ (“FAS 162"). This Standard identifies the sources of accounting principles and the framework for selecting the principles to be used in the preparation of financial statements of nongovernmental entities that are presented in conformity with generally accepted accounting principles. FAS 162 directs the hierarchy to the entity, rather than the independent auditors, as the entity is responsible for selecting accounting principles for financial statements that are presented in conformity with generally accepted accounting principles. The Standard is effective 60 days following SEC approval of the Public Company Accounting Oversight Board amendments to remove the hierarchy of generally accepted accounting principles from the auditing standards. FAS 162 is not expected to have an impact on the financial statements.

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.

~~Off-Balance Sheet Arrangements~~

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

ITEM 7A.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

~~Item 7A. Quantitative and Qualitative Disclosures about Market Risk~~

Not Applicable.

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~~

~~CHINA BROADBAND, INC. AND SUBSIDIARIES~~

~~INDEX TO CONSOLIDATED FINANCIAL STATEMENTS~~

ITEM 8.	~~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~~	FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.

~~Report of Independent Registered Public Accounting Firm~~

~~To the Board of Directors and Stockholders~~

~~China Broadband, Inc.~~

We have audited the accompanying consolidated balance sheets of China Broadband, Inc. (the “Company”) as of December 31, 2008 and 2007 and the related consolidated statements of operations, changes in shareholders’ equity and cash flows for the years then ended. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Company is not required to have, nor are we engaged to perform, an audit of its internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion .An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of China Broadband, Inc. as of December 31, 2008 and 2007, and the results of its operations and its cash flows for the years then ended, in conformity with accounting principles generally accepted ion the United States of America.

The accompanying consolidated financial statements have been prepared assuming the Company will continue as a going concern. As discussed in Note 3 to the consolidated financial statements, the has incurred significant losses during 2008 and 2007, has a working capital deficit at December 31, 2008 and has relied on debt and equity financings to fund operations. These conditions raise substantial doubt about the Company’s ability to continue as a going concern. Management’s plans regarding these matters are also described in Note 3. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

~~/s/ UHY LLP~~

~~UHY LLP~~

~~April 14, 2009~~

~~Albany, NY~~

~~F-1~~

~~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

~~See notes to~~ ~~consolidated financial statements.~~

~~F-2~~

~~CHINA BROADBAND, INC. AND SUBSIDIARIES~~

~~CONSOLIDATED STATEMENTS OF OPERATIONS~~

~~Years Ended December 31, 2008 and 2007~~

Years Ended
December 31, December 31,
2008 2007

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

Selling, general and adminstrative expenses 1,923,386 954,382
Professional fees 619,405 628,490
Depreciation and amortization 3,037,199 1,795,501

Loss from operations (2,958,401 ) (2,197,155 )

Interest & other income / (expense)
Settlement gain 1,300,692 -
Interest income / (expense), net (302,770 ) 6,435
Loss on sale of securities (102,505 ) -
Loss on securities write-down (1,797,378 ) -
Other (10,136 ) (410,988 )

Loss before minority interest (3,870,498 ) (2,601,708 )

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

Loss before income tax (3,260,868 ) (2,161,986 )

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

Net loss $ (3,354,865 ) $ (2,014,031 )

Net loss per share
Basic $ (0.07 ) $ (0.04 )
Diluted $ (0.07 ) $ (0.04 )

Weighted average shares outstanding
Basic 50,332,705 46,504,812
Diluted 50,332,705 46,504,812

~~See notes to consolidated financial statements.~~

~~F-3~~

~~CHINA BROADBAND INC~~

~~CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY AND COMPREHENSIVE LOSS~~

~~Years Ended December 31, 2008 and 2007~~

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 )

~~See notes to consolidated financial statements.~~

~~F-4~~

~~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 $ -

~~See notes to consolidated financial statements.~~

~~F-5~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS~~

1.	~~Basis of Presentation~~

~~China Broadband, Inc., a Nevada corporation and its subsidiaries (“China Broadband”, “we,” “us,” or “the Company”)~~ owns and operates, through its subsidiaries in the People’s Republic of China (“PRC” or “China”), a cable broadband business based in the Jinan region of China and, effective as of July 1, 2008 a television programming guide publication business joint venture in the Shandong Province of China (see Note 3 below). The principal activities of the Company are to provide cable and wireless broadband services, principally internet services, Internet Protocol Point wholesale services, related network equipment rental and sales, and fiber network construction and maintenance through its Jinan Broadband subsidiary. In addition, beginning July 2008 and as a resultfull text of our ~~recently acquired Shandong Newspaper subsidiary, we provide a print based media and television programming guide business. The Company operates in the media segment.~~

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

2.	~~Recent Developments~~

~~Shandong Media Joint Venture - Cooperation Agreement and Additional Payments~~

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’saudited consolidated financial statements as of ~~July 1, 2008.~~December 31, 2009 and 2008 begins on page F-1 of this annual report.

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:~~

ITEM 9.

equals or exceeds 16 million RMB, then we will be required to contribute an additional 20 million RMB (or, approximately $3,000,000 presuming current exchange rates are in effect at such time) to the Shandong Media joint venture;

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

~~is less then 4 million RMB, then we will be required to contribute only an additional 5 million RMB (approximately US $730,000 presuming current exchange rates are in effect at such time).~~

~~F-6~~

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.

~~Settlement Agreement and Convertible Note and Warrant Financing~~

On January 11, 2008, the Company entered into a Settlement Agreement (the “Settlement Agreement”) by and among the Company and its subsidiaries, Stephen P. Cherner, Maxim Financial Corporation, Mark L. Baum, BCGU, LLC, Mark I Lev, Wellfleet Partners, Inc., 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. 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) are as follows:.

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.

~~Among other provisions, pursuant to the Settlement Agreement:~~

Clive Ng transferred 390,000 shares of common stock of Cablecom Holdings (the “Cablecom Holdings Shares”) to the Company. The Cablecom Holding Shares were transferred by Mr. Ng on an “as is basis”, except that such shares would have the same lock-up restrictions, registration or other rights, privileges or benefits as Mr. Ng has for all other shares to be issued to him by Cablecom Holdings. The 390,000 Cablecom Holdings Shares were issued to the Company in April 2008 upon satisfaction of certain conditions in the Settlement Agreement, including, receipt of releases from certain parties listed therein and the shares have been registered for re-sale by Cablecom Holdings, subject to a lock up agreement. 71,880 Cablecom Shares were sold in 2008 for gross proceeds of approximately $361,000. In January and February of 2009, 81,314 shares have been sold for approximately $51,000, however, given the recent market crises and illiquidity, the Company’s management has been forced to significantly write down the value of the remaining shares;

The Company and each of Messrs. Ng and Pu, have agreed to modifications to their employment agreements (the “Employment Agreement Amendments”), reducing their time commitments to the Company and its subsidiary and providing that once replacement executive officers have been hired (and in the case of Mr. Ng, assuming Mr. Pu continues in his role as chief financial officer, eliminating his executive duties and he will only continue as the Chairman and a director of China Broadband and the Company) , requiring in the case of Mr. Ng that he be subject to an ongoing obligation to offer acquisition candidates in the stand-alone, independent broadband business to China Broadband in the future (and recognizing that acquisition candidates involving acting as a joint venture provider of integrated cable television services in the People’s Republic of China and related activities, but which does not include the provision of Stand-Alone Broadband Services are the business of China Cablecom) and allowing them to continue to be involved with certain other activities and to continue in their executive capacities with Cablecom Holdings or its successor after the Proposed Merger. In addition, Mr. Ng waived his right to receive all accrued salary previously owed to him through January 11, 2008;

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

Mr. Ng transferred to certain private investors who acquired shares directly from him in July of 2007, an aggregate of 566,790 shares of Common Stock owned beneficially by him, in exchange for releases from such persons;

~~Chardan Capital, a party to the Settlement Agreement, completed the January 2008 Financing as placement agent, concurrently upon execution by all related parties of the Settlement Agreement;~~

~~F-7~~

~~Mr. David Zale, Mr. Jonas Grossman and Mr. James Cassano were appointed as directors joining Messrs. Pu Yue and Clive Ng on the board;~~

The Company agreed to extend the expiration dates of 4,000,000 warrants to purchase our common stock at an exercise price of $2.00 per share, issued to certain private placement investors (“Investor Warrants”) in the Company’s private placement of common stock and warrants in 2007, from March of 2009, through January 11, 2013, upon receipt of releases from holders of the Investor Warrants. All releases were obtained as of May 2, 2008, resulting in the modification of all of the Investor Warrants; and

The Company has offered to BCGU, LLC, WestPark Capital, Inc., Maxim Financial Corporation, who were issued 500,000, 640,000 and 3,974,800 warrants exercisable at $.60 per share in January of 2007, respectively, the right, at their discretion, to extend the exercisability period of their respective warrants through January 11, 2013 or, in the alternative, the right to receive a scrip right to execute the unexercised portion of their warrants, at any time between the time of expiration date of their unexercised warrants and continuing through January 11, 2013, all of which warrants have been extended accordingly.CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE.

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: None.

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

~~January 2008 Financing of Convertible Notes and Warrants~~

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.~~

~~Placement Agent Fee to Chardan Capital Markets, LLC~~

In connection with their engagement as a placement agent, Chardan Capital has been compensated a $10,000 due diligence fee and reimbursement of legal and other expenses, and a 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.

~~F-8~~33

~~Assignment by Clive Ng of Shares to Investors~~

To incentivize the investors in January 2008 Financing and facilitate such financing, and as contemplated under the terms of the Settlement Agreement, Mr. Clive Ng, 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.

~~Release of Lock - Up Agreements~~

Prior to the assignment of the above shares to the January 2008 Financing investors, the Company, 88 Holdings, Inc., China Broadband Partners, Ltd., BCGU, LLC, MVR Investments, LLC, Stephen P. Cherner and WestPark Capital, Inc. were each shareholder parties to a Lock-Up Agreement dated as of January 23, 2007 (the “Lock-Up Agreement”). The Lock-Up Agreement provided that each such shareholder shall only be permitted to sell 5% of the shares originally issued to them as scheduled in the Lock-Up Agreement, during any 30 day period and, that the Company’s management may review the lock up provisions and increase the number of shares that may be sold provided that, among other conditions, such modification is made ~~pari pasu~~ among all shareholders 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.

3.ITEM 9A(T).

~~Summary of Significant Accounting Policies~~CONTROLS AND PROCEDURES.

~~Principles~~Evaluation of ~~Consolidation~~

The consolidated financial statements include the accounts of the China Broadband, Inc. and its wholly-owned subsidiary, China Broadband Cayman. The statements also includes those of our WOFE entities controlled through the WOFEand Jinan Broadband and Shandong Media. All material intercompany transactions and balances are eliminated in consolidation.

~~Accounting Method~~

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

~~Estimates~~

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

~~Accounts Receivable~~

Accounts receivable are recorded at the invoiced amount after deduction of trade discounts, business tax and allowance. The Company considers accounts receivable to be fully collectible; accordingly, no allowance for doubtful accounts has been established. Accounts receivable of $137,000 and $137,000 as of December 31, 2008 and 2007, respectively, consisted of receivables from customers.

~~Inventory~~

Inventories, consisting of cables, fiber, connecting material, power supplies and spare parts are stated at the lower of cost or market value. Cost is determined using the first-in, first-out (FIFO) method. Inventory of $877,000 and $642,000 as of December 31, 2008 and 2007, respectively, consisted of raw material, parts and accessories.

~~Property and Equipment~~

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

Depreciation is provided for on the straight line basis over the estimated useful lives of the respective assets over a period of five years. Depreciation expense amounted to $2,800,000 and $1,718,000, during the years ended December 31, 2008 and 2007, respectively.

~~Impairment of Long-Lived Assets~~

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

~~F-9~~

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

~~No impairment have been recognized in either 2008 or 2007.~~

~~Intangible Assets~~

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

~~Income Taxes~~

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

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

~~F-10~~

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

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

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

~~Revenue Recognition~~

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

~~Net Loss Per Share~~

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

~~Foreign Currency Translation~~

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

Exchange gains and losses are reported as a separate component of stockholders’ equity and are included in Comprehensive Loss. The currency translation adjustment increased equity by $332,000 for the period ended December 31, 2008.

~~Concentrations of Credit Risk~~

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

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

~~Fair value of Financial Instruments~~

~~The fair values of accounts receivable, prepaid expenses~~ ~~and~~ ~~accounts payable and accrued expenses are estimated to approximate the carrying values at December 31, 2008 due to the short maturities of such instruments.~~

~~Reclassifications~~

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

3.	~~Going Concern~~

The accompanying financial statements are presented on a going concern basis. At December 31, 2008, the Company had a working capital deficit of approximately $675,000. The Company generated a net loss of $3,354,000 and $2,014,000 during the years ended December 31, 2008 and 2007, respectively. These conditions raises substantial doubt about the Company’s ability to continue as a going concern. The Company's continuation as a going concern is dependent on its ability to meet its obligations, to obtain additional financing as may be required and ultimately to attain profitability. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

~~F-11~~

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

4.	~~Convertible Notes~~

As described in Note 2 above, on January 11, 2008 the Company entered into and consummated the Subscription Agreement with ten accredited investors with respect to the issuance of an aggregate of $4,971,250 principal amount of Notes due January 11, 2013, and Class A Warrants to purchase an aggregate of 6,628,333 shares of common stock of the Company at $.60 per share expiring on June 11, 2013. During 2008 the Company incurred $345,000 in interest expense related to these Notes and Warrants.

Based on a predetermined presumed value of $.75 per share as set forth in the Subscription Agreement and related documents during 2008, 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 in 2008. No assurance can be made that these holders will be willing to accept stock in lieu of cash payments for interest in future payments.

5.	~~Marketable Equity Securities~~

The Company holds investments in certain “available-for-sale” marketable equity securities all of which consist of the Cablecom Holdings Shares (Note 2). Available-for-sale securities and are carried at estimated fair value, based on available information. In 2008 the Company recognized an other than temporary loss of $1,797,000 in interest and other income (expense). The securities remain on the Company’s books as of December 31, 2008 at the fair value amount of $270,000.

During 2008, the Company sold 71,880 Cablecom Holdings Shares for gross proceeds of approximately $361,000 leaving the Company with 318,120 Cablecom Holdings Shares. The Company recognized a net loss from the sale of these securities of approximately $103,000.

6.	~~Property and Equipment~~

~~Property and equipment at December 31, 2008 and 2007 consisted of the following:~~

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

7.	~~Accrued Expenses~~

~~Accrued expenses at December 31, 2008 and 2007 consist of the following:~~

2008 2007
Accrued expenses $ 543,000 $ 254,000
Accrued payroll 393,000 300,000
$ 936,000 $ 554,000

8.	~~Accumulated Other Comprehensive Income~~

The foreign currency translation adjustment is the only amount included in accumulated other comprehensive income (loss). The foreign currency translation adjustment is from the Renminbi to the US dollar. We recorded amounts of $(11,000) and $332,000 during 2008 and 2007, respectively.

~~F-12~~

9.	~~Stock Based Compensation~~

~~The following table provides the details of the total stock based compensation during 2008 and 2007:~~

2008 2007

Stock issued for consulting services $ - $ 208,699
Stock option amortization 44,898 -
Warrant amortization 14,198 -
Stock issued in lieu of interest 247,391 -
Stock issued as non registration penalty 12,125 -

$ 318,612 $ 208,699

The Company accounts for its stock option awards pursuant to the provisions of SFAS 123(R) and recorded a charge of $8,216 in connection with the issuance of stock options to employees and a charge of $36,682 in connection with the issuance of stock options to our board members in 2008. During 2007 no options were outstanding and company incurred no charges in 2007.

The fair value of each option award is estimated on the date of grant using the Black-Scholes option valuation model. The Company recognizes the fair value of each option as compensation expense ratably using the straight-line attribution method over the service period, which is generally the vesting period. The Black-Scholes model incorporates the following assumptions:

·	~~Expected volatility - the Company estimates the volatility of common stock at the date of grant using historical volatility.~~

·	~~Expected term - the Company estimates the expected term of options granted based on a combination of vesting schedules, term of the option and historical experience.~~

·	~~Risk-free interest rate - the Company estimates the risk-free interest rate using the U.S. Treasury yield curve for periods equal to the expected term of the options in effect at the time of grant.~~

·	Dividends - the Company uses an expected dividend yield of zero. The Company intends to retain any earnings to fund future operations and, therefore, does not anticipate paying any cash dividends in the foreseeable future.

~~The following table outlines the variables used in the Black-Scholes option-pricing model.~~

	~~2008~~

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

As of December 31, the Company had total unrecognized compensation expense related to options granted to employees and board members of $61,330, which will be recognized over a remaining average period of 2 years.

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. 250,000 options have been issued under the plan.

~~F-13~~

~~A summary of option activity under the Plan as of December 31, 2008, and changes during the period then ended, is presented below:~~

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 250,000 0.67 6.50

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

In connection with the Company’s Share Exchange, capital raising efforts in 2007 and the Company’s January 2008 Financing of Convertible Notes and Class A Warrants described in Item 1 above, the Company has issued warrants to investors and service providers to purchase shares of the Company at a fixed exercise price and for a specified period of time. The following table outlines the warrants outstanding as of December 31, 2008:

Number of
Warrants Exercise Expiration
Name 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
Other Warrants 67,500 $ 0.60 3/13/2013

16,942,300

On January 11, 2008, as part of the Settlement Agreement described above in Item 1, the Company agreed to extend the expiration date of the Maxim Financial Corporation, WestPark Capital, BCGU and the 2007 Private Placement Investor warrants issued in 2007 until January 11, 2013. T~~he Company recorded an expense of $1,426,862 in 2008 as a result of the extension of these warrants.~~

~~On January 11, 2008 the Company issued warrants in connection with the January 2008 Financing of Notes and Class A Warrants to ten accredited investors and Chardan Capital as broker.~~ ~~The Company recorded the value of the Class A Warrants of $504,661 as a discount to the Notes issued therewith and is amortizing this discount over the five year life of the Notes.~~

~~On January 11, 2008 the Company issued the 1,131,667 Broker Warrants expiring June 11, 2013 in connection with the January 2008 Financing to Chardan Capital as broker.~~ ~~The Company is recognizing the value of the Broker Warrants of $226,835 as debt issuance costs and is expensing the value over the five year life of the Convertible Notes.~~

Pursuant to an agreement entered into in April 2007, the Company also issued warrants to a consultant for services provided on March 13, 2008, exercisable at $.60 per share. The Company incurred an expense of $14,198 during 2008 related to the issuance of these warrants and had total unrecognized compensation expense related to these warrants of $7,099, which will be recognized in April 2009.

~~10.~~

~~Income Taxes~~

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

~~F-14~~

Management believes that it has $6,706,453 of pre-exchange transaction net operating loss carryovers that expire in various years through 2025. Since Management has not been able to determine whether income tax returns were filed prior to the January 23, 2007 merger transaction, the future use of any pre-exchange transaction net operating loss carryovers will be significantly limited under section 382 of the internal revenue code because of the change of control in January 2007 as well as by previous changes in the control of the Corporate entity. The extent of these limitations has not yet been determined.

During the year ended December 31, 2008 and 2007 the Company generated an additional U.S. net operating loss carryover of $ 477,000and $1,023,000 which expires in 2028 and 2027, respectively. Jinan Broadband has generated an additional Chinese net operating loss carryover of $407,000 and $732,498 during the year ended December 31, 2008 and 2007, which expires in 2013 and 2012. Shandong Media has generated $86,000 Chinese net operating loss carryover during the year ended December 31, 2008. The estimation of the income tax effect of any future repatriation of the Company’s 51% share of Jinan Broadband’s profits and the non-controlling interest in Shandong Media is not practicable. This is because it may involve additional Chinese taxation on the distributions, or sale proceeds, to the extent that they are in excess of the investments made, but with credits for some or all of the Chinese taxes against U.S. taxes, plus the utilization of operating losses of the WFOE. All of the foregoing would be subject to various tax-planning strategies.

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

The Company has not recognized deferred tax assets relating to the excess of its income tax bases in its non-U.S. subsidiaries over their financial statement carrying value because the Company expects to hold the investments and reinvest future earnings indefinitely. Such excess tax basis is approximately $1,638,000 at December 31, 2008.

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

~~The Company’s deferred tax assets and liabilities at December 31, 2008 and 2007 consisted of:~~

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 )

The deferred tax valuation allowance increased $899,000 and $2,750,000 during the year ended December 31, 2008 and 2007, respectively. $2,280,000 of the 2007 increase in deferred tax valuation allowance amount was acquired in the stock exchange transaction and the remaining $470,000 by the companies operations.

~~F-15~~

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

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 )

~~11.~~

~~Commitments and Contingencies~~

~~Leases~~

The Company pays approximately $58,000 (400,000 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.

Jinan Broadband has a contract with Jinan Center to install cables. The contract value is approximately $730,000 (RMB 5.0 million) for the period of October 2008 through October 2009. As of December 31, 2008 Jinan Broadband has completed approximately $248,000 (RMB 1.7 million) with the remaining $482,000 (RMB 3.3 million) to be completed in 2009.

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

~~Litigation~~

~~The Company is not a party to any legal proceedings.~~

~~12.~~

~~Recent Accounting Pronouncements~~

In December 2008, the FASB issued FSP FAS 132(R)-1, “Employers’ Disclosures about Postretirement Benefit Plan Assets” (“FSP FAS 132(R)-1”). FSP FAS 132(R)-1 applies to an employer that is subject to the disclosure requirements of SFAS No. 132 (revised 2003), “Employers’ Disclosures about Pensions and Other Postretirement Benefits” (“SFAS 132R”) and amends SFAS 132R to provide guidance on an employer’s disclosures about plan assets of a defined benefit pension or other postretirement plan. The disclosures about plan assets required by FSP FAS 132(R)-1 shall be provided for fiscal years ending after December 15, 2009. Earlier application is permitted. We do not expect the adoption of FSP FAS 132(R)-1 to have a material impact on our consolidated financial statements.

In November 2008, the FASB issued EITF Issue No. 08-7, “Accounting for Defensive Intangible Assets” (“EITF 08-7”). EITF 08-7 applies to all acquired intangible assets in situations in which the acquirer does not intend to actively use the asset but intends to hold the asset to prevent its competitors from obtaining access to the asset (a defensive intangible asset). Defensive intangible assets could include assets that the acquirer will never actively use, as well as assets that will be used by the acquirer during a transition period when the intention of the acquirer is to discontinue the use of those assets. EITF 08-7 concluded that a defensive intangible asset should be accounted for as a separate unit of accounting and should be amortized over the period that the defensive intangible asset directly or indirectly contributes to the future cash flows of the entity. EITF 08-7 is effective prospectively for intangible assets acquired on or after the beginning of the first annual reporting period beginning on or after December 15, 2008. Earlier application is not permitted.

~~In June 2008, the FASB issued FSP EITF 03-6-1,~~ ~~Determining Whether Instruments Granted in Share-Based Payment Transactions are Participating Securities~~. This FSP provides that unvested share-based payment awards that contain nonforfeitable rights to dividends or dividend equivalents (whether paid or unpaid) are participating securities and shall be included in the computation of earnings per share pursuant to the two-class method. The Company does not currently have any share-based awards that would qualify as participating securities. Therefore, application of this FSP is not expected to have an effect on the Company's financial reporting.

~~F-16~~

~~In May 2008, the FASB issued FASB Staff Position (FSP) APB 14-1,~~ ~~Accounting for Convertible Debt That May Be Settled in Cash upon Conversion (Including Partial Cash Settlement)~~ ("FSP 14-1"). FSP 14-1 will be effective for financial statements issued for fiscal years beginning after December 15, 2008. The FSP includes guidance that convertible debt instruments that may be settled in cash upon conversion should be separated between the liability and equity components, with each component being accounted for in a manner that will reflect the entity's nonconvertible debt borrowing rate when interest costs are recognized in subsequent periods. The Company is currently assessing the potential effect of the FSP on its financial statements.

~~In May 2008, the FASB issued Statement of Financial Accounting Standards No. 162,~~ ~~The Hierarchy~~ of ~~Generally Accepted Accounting Principles~~ (“FAS 162"). This Standard identifies the sources of accounting principles and the framework for selecting the principles to be used in the preparation of financial statements of nongovernmental entities that are presented in conformity with generally accepted accounting principles. FAS 162 directs the hierarchy to the entity, rather than the independent auditors, as the entity is responsible for selecting accounting principles for financial statements that are presented in conformity with generally accepted accounting principles. The Standard is effective 60 days following SEC approval of the Public Company Accounting Oversight Board amendments to remove the hierarchy of generally accepted accounting principles from the auditing standards. FAS 162 is not expected to have an impact on the financial statements

~~In May 2008, the FASB issued Statement of Financial Accounting Standards No. 162,~~ ~~The Hierarchy~~ of ~~Generally Accepted Accounting Principles~~ (“FAS 162"). This Standard identifies the sources of accounting principles and the framework for selecting the principles to be used in the preparation of financial statements of nongovernmental entities that are presented in conformity with generally accepted accounting principles. FAS 162 directs the hierarchy to the entity, rather than the independent auditors, as the entity is responsible for selecting accounting principles for financial statements that are presented in conformity with generally accepted accounting principles. The Standard is effective 60 days following SEC approval of the Public Company Accounting Oversight Board amendments to remove the hierarchy of generally accepted accounting principles from the auditing standards. FAS 162 is not expected to have an impact on the financial statements.

~~F-17~~

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. Our recent acquisition of AdNet (Note 13) 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.~~

~~13.~~

~~Subsequent Events~~

On April 7, 2009 we signed an agreement to acquire AdNet China, a leader in the delivery of multimedia advertising content to internet cafes in China. AdNet China currently operates in 29 provinces in China with servers in five data centers including Wuhan, Wenzhou, Yantai, Yunan, with a master distribution server in Tongshan.

Partnering with local advertisement agencies, AdNet China provides a network for tens of thousands of daily video ad insertions to entertainment content traffic (movies, music, video, and games). The Company projects a target service initiation of over 3,000 cafes during the first quarter of 2009, and progressing to triple that by the end of the year.

We anticipate many synergic relationships between Adnet and our existing assets. Besides growing Adnet’s core business, the Adnet employees that will be joining China Broadband have experience with and will focus on additional value-added services for both Jinan Broadband and Shandong Media.

~~F-18~~

~~Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosures~~

~~None.~~

~~Item 9A. Controls and Procedures~~

Disclosure 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 theWe maintain disclosure controls and procedures ~~were effective~~(as defined in Rule 13a-15(e) under the Exchange Act) that are designed to ensure that ~~material~~ information ~~relating~~that would be required to ~~the Company~~be disclosed in Exchange Act reports is recorded, processed, summarized and reported ~~in a timely manner~~ within the time ~~periods~~period specified in the ~~Commissions~~SEC’s rules and ~~forms. The term “disclosure controls~~forms, and ~~procedures” as used herein, includes, without limitation, those controls and procedures designed to ensure~~ that such 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~~including to our ~~principal executive~~Chief Executive Officer and ~~financial officers or persons performing similar functions)~~Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.

~~Management~~As required by Rule 13a-15 under the Exchange Act, our management, including our Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of the ~~Company realizes~~design and operation of our disclosure controls and procedures as of December 31, 2009. Based on that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that as of December 31, 2009, and as of the date that the ~~assessment process is an ongoing one. Accordingly, at the time~~evaluation 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~~was completed, our disclosure controls and procedures were ~~effective.~~effective to satisfy the objectives for which they are intended.

Management’s Annual Report on Internal Control Over Financial Reporting

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~~Our 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. The Exchange Act ~~of 1934, as amended. The Company’s~~defines internal control over financial reporting isas a process designed by, or under the supervision of, our principal executive and principal financial officers and effected by our board of directors, management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with accounting principles generally accepted ~~accounting principles. The Company’s internal control over financial reporting~~in the United States of America and includes those policies and procedures that:

~~(i)~~·

~~pertain~~Pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of the assets of the Company;

~~(ii)~~·

~~provide~~Provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with accounting principles generally accepted ~~accounting principles,~~in the United States of America, and that our receipts and expenditures ~~of the Company~~ are being made only in accordance with ~~authorization~~authorizations of ~~Management;~~our management and directors; and

~~(iii)~~·

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

~~Because of inherent limitations,~~All internal control ~~over~~systems, no matter how well designed, have inherent limitations. Therefore, even those systems determined to be effective can provide only reasonable assurance with respect to financial ~~reporting may not prevent or detect misstatements.~~statement preparation and presentation. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Management assessed the effectiveness of ~~the Company’s~~our internal control over financial reporting as of December 31, ~~2008.~~2009. In making this assessment, management used the ~~criteria~~framework set forth in the report entitled Internal Control - Integrated Framework issued by the Committee of Sponsoring ~~Organization~~Organizations of the Treadway Commission, ~~(COSO)~~or COSO. The COSO framework summarizes each of the components of a company’s internal control system, including (i) the control environment, (ii) risk assessment, (iii) control activities, (iv) information and communication, and (v) monitoring.

A material weakness is a deficiency, or a combination of deficiencies, in ~~Internal Control-Integrated Framework. Based~~internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of our annual or interim financial statements will not be prevented or detected on a timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control over financial reporting that ~~assessment, Management has concluded that the Company’s~~is less severe than a material weakness, yet important enough to merit attention by those responsible for oversight of our financial reporting.

Our internal control over financial reporting was not effective as a result 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.~~following identified material weaknesses:

3534

A) In connection with the preparation and audit of our 2009 financial statements and notes, we were informed by our auditor, UHY LLP (“UHY”) of certain deficiencies in our internal controls that UHY considered to be material weaknesses. These deficiencies related to our financial closing procedures and errors in classification of warrants. After discussions between management, our audit committee and UHY, we concluded that the Company had not properly adopted FASB ASC Topic 815-40 “Derivatives and Hedging”: Contracts in Entity’s Own Equity”) (“ASC 815”) and as a result had not reclassified warrants from equity to liabilities as of January 1, 2009. As a result of the change in accounting, the Company recognized a $512,000 charge for the year ended December 31, 2009.

B) The Company does not maintain personnel with a sufficient level of accounting knowledge, experience and training in the selection and application of US GAAP and related SEC disclosure requirements.

C) The Company does not have an accounting policy manual based on US GAAP.

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

~~Item 9B. Other Information~~Changes in Internal Control Over Financial Reporting

~~Effective as~~There have been no changes in our internal control over financial reporting during the fourth quarter of ~~the March 13, 2008, the board of directors of the company approved the China Broadband, Inc. 2008 Stock Incentive Plan (the “Plan”), pursuant~~fiscal year 2009 that have materially affected, or are reasonably likely 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.materially affect, our internal control over financial reporting.

ITEM 9B.

OTHER INFORMATION.

We have no information to disclose that was required to be disclosed in a report on Form 8-K during fourth quarter of fiscal year 2009, but was not reported.

PART III

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

ITEM 10.

DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE.

Directors and Executive ~~Officer and Directors~~Officers

The following sets forth information about our directors and executive officers ~~and directors of the Company~~ as of the date ~~hereof are as~~ ~~set forth in the below chart.~~of this report:

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:

~~Name~~NAME	~~Age~~	~~Position~~AGE	POSITION
Marc Urbach	36	37	President ~~Principal Executive Officer~~
~~Tom Lee~~	51	~~Chief Executive Officer (January 11,2008 - April 8, 2008)~~
Clive Ng	46	47	Chairman, Director
Pu Yue	36	37	Vice Chairman ~~of China Broadband, Ltd. and China Broadband, Inc., and Principal Accounting Officer~~ and Principal Financial and Accounting Officer
James Cassano	62	63	Director
David Zale	55	56	Director
Jonas Grossman	34	35	Director
Priscilla Lu		56	Director ~~(Appointed April 7, 2009)~~

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

James S. Cassano. Mr. 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. Mr. 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. Mr. 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.

Dr. Priscilla Lu,. Ms. Lu age 56, is a Managing Partner of Cathaya Funds, a private equity fund which she co founded in December 2008, focused on investing in mature PRC businesses where she acts as independent consultant in assisting in leveraging cross border alliances. Dr. Lu was PRC advisor to Mayfield since November 2003 for more than 5 years and helped found GSR Fund in China. Between February 2004 and May 2008, Dr Lu served as CEO of ViDeOnline, Inc., a company which delivers digital media content over secured broadband and mobile networks to broadband service providers in PRC. Dr. Lu founded ViDeOnline, Inc. in February 2004. In 1994, Dr. Lu was founder of interWAVE Communications Inc. (Nasdaq “IWAV”), a company for which she served as Chairman and CEO between June 1994 to November 2003, and for which she was an executive during its public offering and NASDAQ Between 1976 and 1993, Dr. Lu served in various capacities at AT&T Bell Laboratories, where she led efforts in digital switching and networking and assisted in pioneering early technologies in CMOS VLSI in microprocessors. Dr. Lu has B.S. and M.S. degrees in Computer Science and Mathematics, University of Wisconsin, Madison and holds a Ph.D. in Electrical Engineering and Computer Science from Northwestern University.

~~Previous Management~~Dr. Lu holds and/or has developed over 50 patents in telecommunications and networking. Ms. Lu serves on several Boards and as Council Advisor on Northwestern University’s School of Engineering, and is a founding member of Cleantech Group in China, and a board member of Silicon Valley Wireless Group.

~~Tom Lee~~ ~~was appointed as Chief Executive Officer effective as~~There are no agreements or understandings for any of ~~January 11, 2008 through April 8, 2008~~our executive officers or director to resign at the request of another person and no officer or director is ~~no longer with~~acting on behalf of nor will any of them act at the ~~Company. Mr. Lee has twenty years~~direction 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.any other person.

~~Employment Agreement Amendments~~

~~Additionally, in connection with the Settlement Agreement~~Directors are elected until their successors are duly elected 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.~~qualified.

Family Relationships

~~None.~~There is no family relationship among any of our officers or directors.

Involvement in Certain Legal Proceedings

~~No officer~~To the best of our knowledge, none of our directors or ~~director of the Company~~executive officers has ~~during the last five years: (i)~~ been convicted in ~~or is currently subject to a pending~~ a criminal ~~proceeding; (ii)~~proceeding, excluding traffic violations or similar misdemeanors, or has been a party to ~~a civil proceeding of a~~any judicial or administrative ~~body of competent jurisdiction and as a result of such~~ proceeding ~~was or is subject to~~during the past five years that resulted in a judgment, decree or final order enjoining the person from future violations of, or prohibiting ~~or mandating~~ activities subject to, ~~any~~ federal or state securities laws, or ~~banking~~a finding of any violation of federal or state securities laws, ~~including,~~except for matters that were dismissed without ~~limitation,~~sanction or settlement. Except as set forth in our discussion below in Item 13, “Certain Relationships and Related Transactions, and Director Independence,” none of our directors, director nominees or executive officers has been involved in any ~~way limiting involvement in~~transactions with us or any ~~business activity,~~of our directors, executive officers, affiliates or ~~finding any violation with respect~~associates which are required to ~~such law, nor (iii) has any bankruptcy petition been filed by or against~~be disclosed pursuant to the ~~business of which such person was an executive officer or a general partner, whether at the time~~rules and regulations of the ~~bankruptcy of for the two years prior thereto.~~SEC.

~~Director Independence~~Board Composition and Committees

~~While the Company’s securities are not trading on a national securities exchange or NASDAQ, the Company’s Board~~Our board of ~~Directors~~directors is currently composed of six members: Clive Ng, Pu Yue, James Cassano, David Zale Jonas Grossman and Priscilla Lu. Our board of directors has determined that James Cassano, David Zale ~~and James Cassano~~ and Jonas Grossman are independent directors under the rules of the American Stock Exchange Company Guide, ~~(the “AMEX~~or the AMEX Company ~~Guide”),~~Guide, because they do not currently own a significant percentage ~~of Company’s~~our shares, are not currently employed by the Company, have not been actively involved in the management of the Company and do not fall into any of the enumerated categories of people who cannot be considered independent directors under the AMEX Company Guide.

In 2008 the Company established an audit committee, nominating committee and compensation committee. Notwithstanding the foregoing and in addition to the general board approvals obtained, a special board committee comprised of disinterested board members, Messrs. Zale and Grossman, ratified the Employment Agreement Amendments of Clive Ng and Pu Yue and the Settlement Agreement.

3937

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~~We currently have standing audit, nominating and ~~its wholly owned subsidiary, China Broadband, Ltd.~~

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

The terms of the AdNet acquisition completed in April of 2009 provides that, effective as of the closing of the AdNet Acquisition on April 7, 2009 and for a minimum of two years thereafter, the Company will make all commercially reasonable best efforts to appoint and maintain Dr. Priscilla Lu to the Board of the China Broadband (with no requirement for re-appointment or nomination after the two year anniversary following the closing), and, that in the event she is unable to continue her duties for any reason during such two year period following closing, the former AdNet Shareholders acting by vote of the majority of the Broadband Shares issued to them at the closing shall have the right, but not the obligation, to appoint or remove a designee to the Board of directors of the Parent for the remainder of such term, which designees shall be reasonably acceptable to the majority of the remaining Board members.

~~Prior to the AdNet acquisition and her appointment to the Board, Dr. Lu was not affiliated with the Company.~~

~~Employment Agreement with Marc Urbach~~

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

~~Interested Party Transactions~~

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

~~Board of Directors Committees~~

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 committeecorporate governance, and compensation ~~committee~~committees, with ~~the committee heads~~ James Cassano, David Zale and Jonas Grossman ~~respectively. Messrs~~serving on each committee. James Cassano serves as the chair of the audit committee, David Zale serves as the chair of the nominating and committee and Jonas Grossman ~~were also each appointed to~~serves as the ~~foregoing committees~~chair of the compensation committee. Mr. Cassano serves as ~~of June 13, 2008. The committees have not met during 2008.~~our audit committee financial expert as that term is defined by the applicable SEC rules.

~~Advisory Board~~The audit committee is primarily responsible for reviewing the services performed by our independent auditors, evaluating our accounting policies and our system of internal controls. The nominating and corporate governance committee is primarily responsible for nominating directors and setting policies and procedures for the nomination of directors. It is also responsible for overseeing the creation and implementation of our corporate governance policies and procedures. The compensation committee is primarily responsible for reviewing and approving our compensation and benefit policies, including compensation of executive officers.

~~We do not currently have an Advisory Board.~~Section 16(A) Beneficial Ownership Reporting Compliance

~~Meetings of our Board of Directors~~

~~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~~Under U.S. securities laws, directors, certain executive officers and ~~stockholders~~persons holding more than 10% of our ~~outstanding~~ common stock ~~to file with~~must report their initial ownership of the ~~Securities~~common stock, and ~~Exchange Commission initial reports of ownership and reports of~~any changes in ~~beneficial~~that ownership, ~~of our common stock. Executive officers, directors and greater-than-10% stockholders are required by~~to the SEC. The SEC ~~regulations to furnish us with copies of all Section 16(a) reports they file. To our knowledge, based~~has designated specific due dates for these reports. Based solely on our review of ~~the~~ copies of such reports ~~furnished to us for~~filed with the ~~period ended December 31, 2008, the Section 16(a) reports required to be filed~~SEC by and written representations of our ~~executive officers,~~ directors and ~~greater-than-10% stockholders were~~executive offers, we believe that our directors and executive offers filed the required reports on ~~a timely basis, other than Mr. Tom Lee who has not filed any report upon departing the company.~~time during 2009.

Code of Ethics

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~~

ITEM 11.

EXECUTIVE COMPENSATION.

Summary of Compensation Table – 2009 and 2008

The following table sets forth information concerning all cash and non-cash compensation awarded to, earned by or paid to 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~~named persons for services rendered in all capacities during the ~~years ended December 31, 2008 and~~noted periods.

Name and Principal Position	Year	Salary ($)		Bonus ($)		Stock Awards ($)		Option Awards ($)		All Other Compensation ($) (4)		Total ($)
Marc Urbach,	2009		120,000	-		-		-			14,419		134,419
President (1)	2008		102,759		-		-		-		12,016		114,775
Clive Ng,	2009		250,000		-		-		-		-		250,000
Chairman (2)	2008		242,607		-		-		-		-		242,607
Pu Yue,	2009		120,000		-		-		-		-		120,000
Vice Chairman (3)	2008		120,000		-		-		-		-		120,000

(1)	Mr. Urbach became our President in connection with our reverse acquisition of Broadband Cayman in January 2007.

(2)

Mr. Ng became our Chairman in connection with our reverse acquisition of Broadband Cayman in January 2007. Pursuant to a settlement agreement in January 2008, Mr. Ng discharged and waived all accrued salary of $212,054 owed to him by the Company and agreed to accrue future salary until a financing is completed. We did not pay any salary to Mr. Ng in 2008 or 2009, but accrued $250,000 for each year.

(3)

Mr. Yue became our Vice Chairman in connection with our reverse acquisition of Broadband Cayman in January 2007. Pursuant to Mr. Yue’s employment agreement, his salary was accrued and was to be paid upon a subsequent financing. Mr. Yue was paid $60,000 in 2008 for partial payment of his employment in 2007. We accrued $120,000 per year for 2008 and 2009. We did not pay any salary to Mr. Yue in 2009.

(4)	All other compensation includes reimbursement for health insurance premiums and vehicle allowance.

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 -

(1) Mr. Ng became an executive and director of the Company, simultaneously with the closing of our Share Exchange Agreement on January 23, 2007. Mr. Ng’s salary was accrued in 2007 and not paid in accordance with his employment agreement which provided that such salary would be paid upon a subsequent financing. Pursuant to the Settlement Agreement in January 2008, Mr. Ng’s discharged and waived all accrued salary of $212,054 owed to him by the Company, and agreed to accrue future salary until a financing.

(2) Mr. Yu became an executive and director of the Company, simultaneously with the closing of our Share Exchange Agreement on January 23, 2007. Mr. Yue’s salary was accrued in 2007 and not paid in accordance with his employment agreement and was to be paid upon a subsequent financing. Mr. Yu was paid $60,000 in 2008.

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

~~Outstanding Equity Awards at Fiscal Year-End Table~~

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

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

4138

~~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.

Employment ~~and Consultant~~ Agreements

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

~~Employment Agreement with Marc Urbach~~

On March 13, 2008, ~~the Company~~we 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~~we agreed to compensate Mr. Urbach $120,000 per year, for a four year term, with bonuses and increases reviewed annually. In addition, ~~the Company~~we granted Mr. Urbach options to purchase 100,000 shares of our 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.

~~Consulting Agreement and Office Lease with Maxim Financial Corporation~~

~~We have~~On February 24, 2007, we entered into a ~~year~~formal employment agreement with Mr. Ng, pursuant 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~~agreed to compensate Mr. Ng $250,000 per year with bonuses and increases reviewed annually. The terms also provided that such salary would be paid upon subsequent financing. On January 11, 2008, we entered into an Amendment to the Employment Agreement which provided Mr. Ng would discharge and waive all accrued salary owed to him by the Company prior to the date of said amendment and agreed to accrue future salary until a financing pursuant to the Settlement Agreement.

On February 24, 2007, we entered into a formal employment agreement with Mr. Yue pursuant to which we agreed to compensate Mr. Yu $120,000 per year with bonuses and increases reviewed annually. The terms also provided that such salary would be paid upon subsequent financing.

We have not provided retirement benefits (other than a state pension scheme in which all of 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~~employees in China participate) or severance or change of control benefits 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~~named executive officer.

Outstanding Equity Awards at Year End

No equity awards were made during the year ended 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.~~

2009.

~~Item 12.~~ The following table sets forth the equity awards outstanding at December 31, 2009.

	Option Awards								Stock Awards
Name	Number of securities underlying unexercised options (#) exercisable		Number of securities underlying unexercised options (#) unexercisable		Equity incentive plan awards: Number of securities underlying unexercised unearned options (#)		Option exercise price ($)		Number of shares or units of stock that have not vested (#)		Market value of shares of units of stock that have not vested ($)		Equity incentive plan awards: Number of unearned shares, units or other rights that have not vested (#)		Equity incentive plan awards: Market or payout value of unearned shares, units or other rights that have not vested ($)
Marc Urbach		50,000		50,000		0	$	1.00		0		0		0		0

Mr. Urbach holds options to exercise 25,000 shares on March 13, 2010 and 25,000 shares on March 13, 2011.

Compensation of Directors

The table below sets forth the compensation of our directors for the fiscal year ended December 31, 2009.

Name	Fees earned or paid in cash ($)	Stock awards ($)	Option awards ($)		Non-equity incentive plan compensation ($)	Nonqualified deferred compensation earnings ($)	All other compensation ($)	Total ($)
David Zale	-	-		5,625	-	-	-		5,625
James Cassano	-	-		5,625	-	-	-		5,625
Jonas Grossman	-	-		5,625	-	-	-		5,625

We did not compensate our directors in 2009. Our three independent directors were each granted options in 2008 to acquire 50,000 shares at $.45 per share, becoming exercisable 50% at grant and 25% per year thereafter.

ITEM 12.

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS.

Security Ownership of Certain Beneficial Owners and Management ~~and Related Stockholder Matters~~

The following table sets forth ~~certain~~ information regarding beneficial ownership of our common stock ~~beneficially owned~~ as of March ~~20, 2009 for~~31, 2010 (i) by each ~~shareholder we know~~person who is known by us to ~~be the beneficial owner of~~beneficially own more than 5% ~~or more~~ of our ~~outstanding~~ common ~~stock,~~stock; (ii) by each of our ~~executive~~ officers and ~~directors,~~directors; and (iii) by all ~~executive~~of our officers and directors as a group. ~~In general,~~

Name & Address of Beneficial Owner	Office, if Any	Title of Class	Amount & Nature of Beneficial Ownership(1)			Percent of Class(2)
Officers and Directors
Marc Urbach 79 Green Hill Rd Springfield, NJ 07081	President	Common Stock, $0.001 par value		75,000	(3)		*
Clive Ng 1900 Ninth Street, 3rd Floor Boulder, CO 80302	Chairman	Common Stock $0.001 par value		24,336,248	(4)		37.39	%
Pu Yue Apartment 2001, Bld. 2 No. 1 Xiangheyman Road Dongcheng District Beijing, China 100028	Vice Chairman and Chief Financial Officer	Common Stock $0.001 par value		0			*
James Cassano 117 Graham Way Devon, PA 19333	Director	Common Stock $0.001 par value		37,500	(5)		*
David Zale 825 Third Avenue, Suite 244 New York, NY 10022	Director	Common Stock $0.001 par value		112,500	(6)		*
Jonas Grossman 17 State Street, Suite 1600 New York, NY 10004	Director	Common Stock $0.001 par value		364,875	(7)		*
All officers and directors as a group (6 persons named above)		Common Stock $0.001 par value		24,926,123			38.30	%
5% Security Holders
Clive Ng 1900 Ninth Street, 3rd Floor Boulder, CO 80302	Chairman	Common Stock $0.001 par value		24,336,248	(4)		37.39	%
China Broadband Partners, Ltd. 1900 Ninth Street, 3rd Floor Boulder, CO 80302		Common Stock $0.001 par value		17,503,495	(4)		26.89	%
88 Holdings, Inc. 1900 Ninth Street, 3rd Floor Boulder, CO 80302		Common Stock $0.001 par value		3,582,753	(4)		5.50	%
BeeteeBee, Ltd. 1900 Ninth Street, 3rd Floor Boulder, CO 80302		Common Stock $0.001 par value		3,250,000	(4)		4.99	%
Oliveira Capital, LLC 18 Fieldstone Ct. New City, NY 10956		Common Stock $0.001 par value		3,537,034	(8)		5.43	%
Pasquale & Diane Croce 1005 Ridgehaven Rd. West Chester, PA 19382-2372		Common Stock $0.001 par value		3,333,334			5.12	%
Total Shares Owned by Persons Named above:		Common Stock $0.001 par value		31,206,616			47.95	%

* Less than 1%.

(1)	Beneficial ownership is determined in accordance with the rules of the SEC and includes voting or investment power with respect to the common stock.

(2)	A total of 64,761,396 shares of Common Stock as of March 31, 2010 are considered to be outstanding pursuant to SEC Rule 13d-3(d)(1). For each beneficial owner above, any options exercisable within 60 days have been included in the denominator.

(3)	Includes shares issuable upon options to exercise 75,000 shares which are exercisable within 60 days at $1.00 per share. Does not include options to purchase an additional 25,000 shares at $1.00 which are not yet exercisable.

(4)	Includes 3,582,753 shares held by 88 Holdings, Inc., 3,250,000 held by BeeteeBee, Ltd. and 17,503,495 shares held by China Broadband Partners, Ltd. Mr. Ng controls and owns 100% beneficial ownership over these entities.

(5)	Includes shares issuable upon options to exercise 37,500 shares which are exercisable at $.45. Does not include options to purchase an additional 12,500 shares at $.45 which are not yet exercisable.

(6)

Includes 50,000 shares of common stock and 25,000 warrants to purchase common stock at $2.00 acquired in our January 2007 private offering. Also includes shares issuable upon options to exercise 37,500 shares which are exercisable at $.45. Does not include options to purchase an additional 12,500 shares at $.45 which are not yet exercisable.

(7)

Mr. Grossman is an officer and part owner of Chardan Capital Markets, LLC, or Chardan Capital, which received warrants in connection with its services as placement agent in connection with our January 2008 private placement and which also invested its fee into notes and warrants. Mr. Grossman has shared voting and dispositive control over securities owned by Chardan Capital but not over securities owned by other principals of Chardan Capital. Chardan Capital or its principals own in aggregate (i) $121,250 principal amount of convertible promissory notes, convertible into an aggregate of 161,667 shares, of which, Mr. Grossman disclaims beneficial ownership of $93,969 of principal amount of note and 125,292 shares issuable upon all conversion thereof, (ii) 1,131,666 shares underlying warrants, of which Mr. Grossman disclaims beneficial ownership of 877,041 shares issuable upon conversion thereof and, (iii) 161,667 shares underlying Class A Warrants, of which Mr. Grossman disclaims beneficial ownership of 125,292 shares issuable upon conversion thereof. Also includes shares issuable upon options to exercise 37,500 shares which are exercisable at $.45. Does not include options to purchase an additional 12,500 shares at $.45 which are not yet exercisable.

(8)	Mr. Steven Oliveira is the sole member of Oliveira Capital, LLC and has voting and dispositive over securities owned by Oliveira Capital, LLC

Changes in Control

There are no arrangements known to us, including any pledge by any person of our securities, the operation of which may at a ~~person is deemed~~subsequent date result in a change in control of the Company.

Securities Authorized for Issuance Under Equity Compensation Plans

The following table includes the information as of the end of 2009 for each category of our equity compensation plan:

Plan category	Number of securities to be issued upon exercise of outstanding options, restricted stock, warrants and rights (a)		Weighted-average exercise price of outstanding options, restricted stock, warrants and rights (b)		Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a)) (c)
Equity compensation plans approved by security holders		-		-		-
Equity compensation plans not approved by security holders (1)		317,500	$	.61		87,500
Total		317,500	$	.61		87,500

(1)

Effective as of the March 13, 2008, our board of directors of the company approved the China Broadband, Inc. 2008 Stock Incentive Plan, or the Plan, pursuant to which options or other similar securities may be granted. The maximum aggregate number of shares of our common stock that may be issued under the Plan is 2,500,000 shares. 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 above) with the remaining 217,500 issued to certain directors and a consultant in 2008.

ITEM 13.

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE.

Transactions with Related Persons

The following includes a summary of transactions since the beginning of the 2009 fiscal year, or any currently proposed transaction, in which we were or are to be a ~~"beneficial owner"~~participant and the amount involved exceeded or exceeds the lesser of $120,000 or one percent of the average of our total assets at year-end for the last two completed years, and in which any related

person had or will have a ~~security if~~direct or indirect material interest (other than compensation described under Item 11, “Executive Compensation”). We believe the terms obtained or consideration that ~~person has~~we paid or ~~shares~~received, as applicable, in connection with the ~~power~~transactions described below were comparable to ~~vote or direct the voting of such security,~~terms available or the ~~power to dispose~~amounts that would be paid or ~~to direct the disposition~~received, as applicable, in arm’s-length transactions.

The Company has a loan receivable for $290,000 as of December 31, 2009 from a related party, Music Magazine. The loan is unsecured, interest free and has no fixed repayment terms. Music Magazine is related through Modern Movie Times Magazine.

During the year ended December 31, 2009, Jinan Broadband paid $2,643,204 to Jinan Parent. At December 31, 2009, $152,000 remains due to Jinan Parent. This amount represents the remaining balance due from the initial acquisition which is unsecured, interest free and has no fixed repayment terms.

As of December 31, 2009, amounts due from shareholders include $109,000 from Shandong Broadcast & TV Weekly Press and $60,000 from Modern Movie & TV Biweekly Press. Both companies are our partners in our Shandong Publishing joint venture company. The amount due from Shandong Broadcast & TV Weekly Press is unsecured, interest free and has no fixed repayment terms. The amount due from Modern Movie & TV Biweekly Press is unsecured, interest free and is due on December 31, 2010. During the year ended December 31, 2009, we advanced approximately $650,000 to these companies and also received repayments of $481,000.

On January 11, 2008, we entered into a settlement agreement, or the Settlement Agreement, which was negotiated by the Company, its advisors and management and certain shareholders, for purposes of facilitating our business plan and expediting and facilitating our financing activities and avoiding disputes between management and certain investors and consultants concerning possible claims that such investors suggested might be brought against these principals for their activities in forming and operating China Cablecom and its entry into a merger agreement as being violative of their employment agreements with the Company. The Settlement Agreement provided, subject to the terms thereof, for general mutual releases of all executives and management and their affiliated entities and also provided for the modification of employment agreements of both, Mr. Clive Ng, our Chairman and Mr. Yue Pu, our Vice Chairman and former Chief Financial Officer. In connection with the Settlement Agreement, we received 390,000 shares of China Cablecom from Mr. Clive Ng, our Chairman. The value of the shares declined substantially, and may continue to fluctuate and decline further. During the year ended December 31, 2009, we sold 236,665 shares for total net proceeds of $175,000 and recorded a net loss on the sales of approximately $15,000. As of December 31, 2009, we hold 81,455 shares of China Cablecom. The fair value of the remaining 81,455 shares at December 31, 2009 is approximately $47,000.

Except as set forth in our discussion above, none of ~~such security. A person is also deemed~~our directors, director nominees or executive officers has been involved in any transactions with us or any of our directors, executive officers, affiliates or associates which are required to be ~~a beneficial owner~~disclosed pursuant to the rules and regulations 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 outstandingSEC.

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 (11) 6.0 %
All Directors and Executive Officers 26,530,290 52.4 %

* Indicates less than 1%. Promoters and Certain Control Persons

~~(1) Indicates shares~~We did not have any promoters at any time during the past five fiscal years.

Director Independence

We currently have two independent directors, Mr. Cassano and ~~percentages held as of March 20, 2009, based on 50,585,455 shares outstanding, as calculated in accordance with the above formula.~~

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

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

(4) Includes shares issuable upon options to exercise 50,000 shares which are exercisable within 60 days at $1.00 per share. Does not include options to purchase an additional 50,000 shares at $1.00 which are not yet exercisable. The address for Mr. Urbach is 79 Green Hill Rd, Springfield, NJ 07081.

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

~~(6) The address for~~ Mr. Zale as the term “independent” is ~~825 Third Avenue, Suite 244, New York, New York 10022. Share amounts include 50,000 shares~~defined by the rules of ~~common stock~~the Nasdaq Stock Market.

ITEM 14.

PRINCIPAL ACCOUNTING FEES AND SERVICES.

Independent Auditors’ Fees

The following is a summary of the fees billed to the Company by its principal accountants for professional services rendered for the years ended December 31, 2009 and ~~25,000 warrants to purchase common stock at $2.00 acquired~~2008:

	Year Ended December 31,
	2009		2008
Audit Fees	$	56,000	$	99,300
Audit-Related Fees		0		0
Tax Fees		0		0
All Other Fees		0		0
TOTAL	$	56,000	$	99,300

“Audit Fees” consisted of the aggregate fees billed for professional services rendered for the audit of our annual financial statements and the reviews of the financial statements included in our January 2007 private offering. .. Includes shares issuable upon options to exercise 25,000 shares which are exercisable at $.45. Does not include options to purchase an additional 25,000 shares at $.45 which are not yet exercisable.

~~(7) The address~~Forms 10-Q and for Mr. Cassano is 117 Graham Way, Devon, Pennsylvania, 19333.. Includes shares issuable upon options to exercise 25,000 shares which are exercisable at $.45. Does not include options to purchase an additional 25,000 shares at $.45 which are not yet exercisable.

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

~~(9) Mr. Grossman is an officer and part owner of Chardan Capital Markets, LLC (“Chardan Capital”), which received warrants in connection with its~~any other services ~~as placement agent~~that were normally provided in connection with our ~~January 2008 Note~~statutory and warrant offering and which also invested its fee into Notes and Warrants. Mr. Grossman has shared voting and dispositive control over securities owned by Chardan capital but not over securities owned by other principals of Chardan Capital. Chardan Capitalregulatory filings or its principals own in aggregate (i) $121,250 principal amount of convertible promissory notes, convertible into an aggregate of 161,667 shares, of which, Mr. Grossman disclaims beneficial ownership of $93,969 of principal amount of note and 125,292 shares issuable upon all conversion thereof, (ii) 1,131,666 shares of Warrants, of which, Mr. Grossman disclaims beneficial ownership of 877,041 shares issuable upon conversions thereof and, (iii) 161,667 shares of Class A Warrants, of which Mr. Grossman disclaims beneficial ownership of 125,292 shares issuable upon conversion thereof. Includes shares issuable upon options to exercise 25,000 shares which are exercisable at $.45. Does not include options to purchase an additional 25,000 shares at $.45 which are not yet exercisable.engagements.

~~(10) Indicates shares acquired from China Broadband Partners, Ltd., an entity controlled by Clive Ng, in conjunction with our January 2008 convertible note and warrant financing.~~

~~Item 13. Certain Relationships and~~“Audit Related ~~Transactions, and Director Independence.~~

~~Related Transactions~~

~~Settlement Agreement with Management~~

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

~~Share Exchange Agreement with Broadband Shareholders~~

~~In October of 2006 we entered into a letter of intent to acquire all~~Fees” consisted 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~~aggregate fees billed 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.

~~Consulting Agreement with Maxim Financial Corporation~~

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

●

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

●

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

●

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

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

●

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

●

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

●

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

●

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

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

~~Conflicts of Interest~~

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

~~Conflicts Relating to Officers and Directors~~

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

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 andprofessional services and potential customers. These activities may give rise to conflicts between or among the interests of ours and our subsidiaries and Jinan Parent and our and other businesses with which our affiliates are associated. Our affiliates are in no way prohibited from undertaking such activities, and neither we nor our shareholders will have any right to require participation in such other activities.

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

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

~~Our Subsidiaries~~

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.”

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

~~Appointment of Auditors~~

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

~~Audit Fees~~

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

~~Audit-Related Fees~~

~~We did not pay any fees to UHY, LLP~~rendered for assurance and related services that ~~are~~were reasonably related to the performance of the audit or review of our financial statements and were not ~~reported under~~otherwise included in Audit ~~Fees above, during our fiscal years ending December 31, 2008 and December 31, 2007.~~Fees.

“Tax ~~and All Other Fees~~

~~We did not pay any~~Fees” consisted of the aggregate fees ~~to UHY, LLP Certified Public Accountants,~~billed for professional services rendered for tax compliance, tax advice and tax planning. Included in such Tax Fees were fees for preparation of our tax returns and consultancy and advice on other tax planning matters.

“All Other Fees” consisted of the aggregate fees billed for products and services provided and not otherwise included in Audit Fees, Audit Related Fees or ~~other work during our fiscal years ending December 31, 2008 and December 31, 2007.~~Tax Fees.

Pre-Approval Policies and Procedures

~~We have implemented pre-approval policies and procedures related to~~Under the ~~provision~~Sarbanes-Oxley Act of 2002, all audit and non-audit ~~services. Under these~~services performed by our auditors must be approved in advance by our board of directors to assure that such services do not impair the auditors’ independence from us. In accordance with its policies and procedures, our board of directors ~~pre-approves all services to be provided~~pre-approved the audit and non-audit service performed by UHY LLP ~~Certified Public Accountants and the estimated fees related to these services.~~

~~With respect to the audit of~~for our consolidated financial statements as of ~~December 31, 2008,~~ and for the year ~~then~~ ended ~~none of the hours expended on UHY, LLP Certified Public Accountants, engagement to audit those~~December 31, 2009.

PART IV

ITEM 15.

EXHIBITS, FINANCIAL STATEMENT SCHEDULES.

Financial Statements and Schedules

The financial statements ~~were attributed to work by persons other than UHY, LLP Certified Public Accountants, full-time, permanent employees.~~

~~Through the date~~are set forth under Item 8 of this filing, UHY LLP had a continuing relationship with UHY Advisors NY, Inc. (“Advisors”) from which it leased auditing staff who were full time, permanent employees of Advisors and through which UHY LLP’s partners provide non-audit services. UHY LLP has only a few full time employees. Therefore, few, if any, ofannual report on Form 10-K. Financial statement schedules have been omitted since they are either not required, not applicable, or the ~~audit services performed were provided by permanent full-time employees of UHY LLP. UHY LLP manages and supervises the audit services and audit staff, and~~information is ~~exclusively responsible for the opinion rendered in connection with its examination.~~otherwise included.

4543

~~PART IV~~Exhibit List

~~Item 15. Exhibits, Financial Statement Schedules~~The following exhibits are filed as part of this report or incorporated by reference:

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 filed on January 17, 2008]

Exhibit No.		Description
10.6		Form of Subscription and Release Agreement, dated ~~January 11, 2008)~~March 2008 [Incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on May 8, 2008]

~~10.13~~10.7		~~Employment~~Form of Release Agreement, ~~Amendment,~~ dated ~~Janaury 11,~~March 2008 ~~amending employment agreement of Clive Ng. (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]

~~10.14~~10.8		~~Employment~~Form of Subscription Agreement, ~~Amendment,~~ dated ~~Janaury 11, 2008, amending employment agreement of Pu Yue. (Incorporated~~January 23, 2007, by and among the Company and certain investors. [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]

~~10.15~~10.9		~~Funds Escrow~~Cooperation Agreement bydated as of December 26, 2006 between China Broadband, Ltd. and ~~among the Company, Grushko and Mittman, P.C.~~Jianan Guangdian Jiahe Digital Television Co., ~~and investors. (Incorporated~~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]

~~10.16~~10.10		~~Form of Class A Warrants issued to investors, exercisable at $.60 per share~~Exclusive Service Agreement, dated December, 2006, by and ~~expiring on June 11, 2013. (Incorporated~~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]

~~10.17~~		Broker Warrant issued to Chardan Capital Markets, LLC, to purchase 1,131,667 shares of Common Stock, at an exercise price of $.50 per share, expiring on June 11, 2013. (Incorporated by reference from the Corporation’s Current Report on Form 8-K, dated January 11, 2008)

~~10.18~~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.*

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

10.16		Trustee Appointment Letter, dated as of April 7, 2009, by China Broadband, Ltd., appointing Mr. Wang Yingqi as trustee on its behalf*

10.17		Employment Agreement, dated January 24, 2007, between China Broadband, Ltd. and Clive Ng. [incorporated by reference to Exhibit 10.6 to the Company’s Current Report on Form 8-K filed March ~~7, 2008)~~20, 2007]

10.18		Employment Agreement Amendment, dated January 11, 2008, between China Broadband, Ltd. and Clive Ng. [Incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed on January 17, 2008]

10.19		Employment Agreement, dated ~~as of March 13, 2008,~~January 24, 2007, between China Broadband, ~~Inc.~~Ltd. and ~~Marc Urbach. (Incorporated~~Pu Yue. [incorporated by reference ~~from~~to Exhibit 10.8 to the ~~Corporation’s~~Company’s Current Report on Form 8-K ~~dated~~filed March ~~7, 2008)~~20, 2007]

10.20		~~Share Issuance~~Employment Agreement Amendment, dated January 11, 2008, between China Broadband, ~~Inc., a Nevada corporation, China Broadband, Ltd., a Cayman Islands corporation, Waanshi Wangjing Media Technologies (Beijing) Co.,~~ Ltd. ~~(a/k/a AdNet Media technologies (Beijing) Co., Ltd. (“AdNet”)~~ and ~~its shareholders, dated as of April 7, 2009 (Incorporated~~Pu Yue. [Incorporated by reference ~~from~~to Exhibit 10.3 to the ~~Corporation’s~~Company’s Current Report on Form 8-K filed on ~~April~~January 17, 2008]

10.21		Employment Agreement, dated March 13, ~~2009)~~2008, between the Company and Marc Urbach. [incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed March 13, 2008]

10.22		Consulting Agreement, dated January 24, 2007, between the Company and Maxim Financial Corporation. [incorporated by reference to Exhibit 10.9 to the Company’s Amended Current Report on Form 8-K/A filed June 4, 2007]

Exhibit No.		Description
21		Subsidiaries of the Company.*

31.1		~~Certification by~~Certifications of Principal Executive Officer ~~pursuant~~Pursuant to ~~Sarbanes Oxley~~ Section ~~302.~~302 of the Sarbanes-Oxley Act of 2002.*

31.2		~~Certification by~~Certifications of Principal Financial Officer ~~pursuant~~Pursuant to ~~Sarbanes Oxley~~ Section ~~302.~~302 of the Sarbanes-Oxley Act of 2002.*

32.1		Certification byof Principal Executive Officer ~~pursuant~~Pursuant to ~~18 U.S.C.~~ Section ~~1350.~~906 of the Sarbanes-Oxley Act of 2002.*

32.2		Certification byof Principal Financial Officer ~~pursuant~~Pursuant to ~~18 U.S.C.~~ Section ~~1350.~~906 of the Sarbanes-Oxley Act of 2002.*

99.1		China Broadband, Inc. 2008 Stock Incentive Plan. ~~(Incorporated~~[incorporated by reference ~~from~~to Exhibit 99.1 to the ~~Corporation’s~~Company’s Current Report on Form 8-K ~~dated~~filed March ~~7, 2008)~~ 13, 2008]

99.2		China Broadband, Inc. Audit Committee Charter [incorporated by reference to Exhibit 99.2 to the Company’s Annual Report on Form 10-K filed April 15, 2009]

99.3		China Broadband, Inc. Nominating and Corporate Governance Committee Charter [incorporated by reference to Exhibit 99.3 to the Company’s Annual Report on Form 10-K filed April 15, 2009]

99.4		China Broadband, Inc. Compensation Committee Charter [incorporated by reference to Exhibit 99.4 to the Company’s Annual Report on Form 10-K filed April 15, 2009]

~~SIGNATURES~~*Filed herewith

~~Pursuant to the requirements of Section~~SIGNATURES

In accordance with section 13 or 15(d) of the Securities Exchange Act of 1934, the ~~registrant has duly~~Registrant caused this ~~report~~Report on Form 10-K to be signed on its behalf by the undersigned, onthereto duly authorized individual.

Date: April 15, ~~2009, thereunto duly authorized.~~2010


	CHINA BROADBAND, ~~INC~~INC.

	By:	/s/ Marc Urbach
	~~Name:~~	Marc Urbach ~~Title:~~
		President ~~(Principal Executive Officer)~~

	By:	/s/ Pu Yue
		Pu Yue
		Vice Chairman

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

Each person whose signature appears below hereby authorizes Marc Urbach and Pu Yue, and each or any of them, as attorneys-in-fact to sign on his or her behalf, individually, and in each capacity stated below, and to file all amendments and/or supplements to this annual report on Form 10-K.

~~Signatures~~Signature	Title	Date


/s/Marc Urbach	President ~~(Principal Executive Officer)~~	April 15, ~~2009~~2010
Marc Urbach	(Principal Executive Officer)

/s/ Pu Yue	Vice Chairman ~~of China Broadband, Ltd. and~~	April 15, ~~2009~~2010
Pu Yue	~~China Broadband, Inc., and Principal Accounting~~ ~~Officer and~~ (Principal Financial ~~Officer~~ and ~~Director~~ Accounting Officer)

/s/Clive Ng	Chairman ~~Director~~	April 15, ~~2009~~2010
Clive Ng

/s/ James Cassano	Director	April 15, ~~2009~~2010
James Cassano

/s/ David Zale	Director	April 15, ~~2009~~2010
David Zale

/s/Jonas Grossman	Director	April 15, ~~2009~~2010
Jonas Grossman

8. Financial Statements and Supplementary Data

CHINA BROADBAND, INC. AND SUBSIDIARIES

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

		Page

Report of Independent Registered Public Accounting Firms		F-1

Consolidated Financial Statements:

Balance Sheets as of December 31, 2009 and 2008		F-2

Statements of Operations for the years ended December 31, 2009 and 2008		F-3

Statements of Changes in Shareholders’ Equity and Comprehensive Loss for the years ended December 31, 2009 and 2008		F-4

Statements of Cash Flows for the years ended December 31, 2009 and 2008		F-5

Notes to Consolidated Financial Statements		F-6

4847

Report of Independent Registered Public Accounting Firm

To the Board of Directors and Shareholders

China Broadband, Inc. and subsidiaries

We have audited the accompanying consolidated balance sheets of China Broadband, Inc. and subsidiaries (the “Company”) as of December 31, 2009 and 2008 and the related consolidated statements of operations, changes in shareholders’ equity and comprehensive loss and cash flows for the years then ended. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Company is not required to have, nor are we engaged to perform, an audit of its internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of China Broadband, Inc. and subsidiaries as of December 31, 2009 and 2008, and the results of their operations and their cash flows for the years then ended, in conformity with accounting principles generally accepted in the United States of America.

As discussed in Note 14 to the consolidated financial statements, the Company adopted ASC Topic 815-40, “Derivatives and Hedging: Contracts in Entity’s Own Equity” (effective January 1, 2009) as it relates to the Company’s warrants.

The accompanying consolidated financial statements have been prepared assuming the Company will continue as a going concern. As discussed in Note 3 to the consolidated financial statements, the Company has incurred significant losses during 2009 and 2008, has a working capital deficit at December 31, 2009 and has relied on debt and equity financings to fund their operations. These conditions raise substantial doubt about the Company’s ability to continue as a going concern. Management’s plans regarding these matters are also described in Note 3. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

/s/ UHY LLP

April 15, 2010

Albany, New York

F-1

China Broadband, Inc. and Subsidiaries

CONSOLIDATED BALANCE SHEETS

December 31, 2009 and 2008

	2009			2008
ASSETS
Current assets:
Cash and cash equivalents	$	2,190,494		$	4,425,529
Marketable equity securities, available for sale		47,244			254,496
Accounts receivable, net		213,713			136,709
Inventory		455,492			877,309
Prepaid expense		237,704			46,380
Loan receivable from related party		289,974			268,449
Amounts due from shareholders		168,907			64,394
Other current assets		78,478			88,883
Total current assets		3,682,006			6,162,149

Property and equipment, net		7,362,641			9,299,473
Intangible assets, net		4,294,614			4,218,758
Other assets		430,561			424,462

Total assets	$	15,769,822		$	20,104,842

LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	1,350,076		$	1,237,251
Accrued expenses		1,839,272			936,134
Deferred revenue		1,637,283			1,382,103
Deferred tax liability		281,626			-
Convertible notes payable		304,853			-
Warrant liabilities		819,150			-
Loan payable		398,960			-
Payable to Shandong Media		145,679			145,679
Payable to Jinan Parent		152,268			2,795,472
Other current liabilities		378,847			72,013
Total current liabilities		7,308,014			6,568,652

Convertible notes payable		4,665,306			4,564,427
Deferred tax liability and uncertain tax position liability		454,578			790,617
Total liabilities		12,427,898			11,923,696

Committments and Contingencies

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, 64,761,396 and 50,585,455 issued and outstanding		64,762			50,586
Additional paid-in capital		14,901,493			13,372,358
Accumulated deficit		(17,215,041	)		(12,200,287	)
Accumulated other comprehensive income		331,283			320,858
Total China Broadband shareholders' (deficit) equity		(1,917,503	)		1,543,515
Noncontrolling interests		5,259,427			6,637,631

Total shareholders’ equity		3,341,924			8,181,146

Total liabilities and shareholders' equity	$	15,769,822		$	20,104,842

See notes to consolidated financial statements.

F-2

China Broadband, Inc. and Subsidiaries

CONSOLIDATED STATEMENTS OF OPERATIONS

Years Ended December 31, 2009 and 2008

	2009			2008

Revenue	$	8,443,088		$	6,361,970
Cost of revenue		5,661,502			3,740,381
Gross profit		2,781,586			2,621,589

Selling, general and adminstrative expenses		3,227,625			1,923,386
Professional fees		641,334			619,405
Depreciation and amortization		3,564,334			3,037,199

Loss from operations		(4,651,707	)		(2,958,401	)

Interest & other income / (expense)
Settlement gain		-			1,300,692
Interest income		8,354			43,183
Interest expense		(362,424	)		(345,953	)
Change in fair value of warrant liabilities		(512,027	)		-
Loss on sale and write-down of marketable equity securities		(14,828	)		(1,899,883	)
Goodwill impairment		(1,239,291	)		-
Other		(13,613	)		(10,136	)

Loss before income taxes and non-controlling interest		(6,785,536	)		(3,870,498	)

Income tax benefit (expense)		243,655			(93,997	)

Net loss, net of tax		(6,541,881	)		(3,964,495	)

Plus: Net loss attributable to noncontrolling interests		1,102,756			609,630

Net loss attributable to China Broadband shareholders	$	(5,439,125	)	$	(3,354,865	)

Net loss per share
Basic	$	(0.09	)	$	(0.07	)
Diluted	$	(0.09	)	$	(0.07	)

Weighted average shares outstanding
Basic		60,334,180			50,332,705
Diluted		60,334,180			50,332,705

See notes to consolidated financial statements.

F-3

China Broadband, Inc. and Subsidiaries

CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY AND COMPREHENSIVE LOSS

Years Ended December 31, 2009 and 2008

											Accumulated			China
					Additional						Other			Broadband						Total
	Common		Par		Paid-in			Accumulated			Comprehensive			Shareholders'			Noncontrolling			Shareholders’			Comprehensive
	Shares		Value		Capital			Deficit			Income(loss)			(Deficit)/Equity			Interest			Equity			Loss

Balance December 31, 2007		50,048,000	$	50,048	$	10,485,874		$	(8,845,424	)	$	331,764		$	2,022,262		$	4,879,802		$	6,902,064

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

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

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

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

Shares issued as payment for convertible note interest		329,856		330		247,061			-			-			247,391			-			247,391

Shandong Media joint venture		-		-		-			-			-			-			2,367,459			2,367,459

Comprehensive loss:
Net loss		-		-		-			(3,354,865	)		-			(3,354,865	)		(609,630	)		(3,964,495	)		(3,354,865	)
Foreign currency translation adjustments		-		-		-			-			(10,906	)		(10,906	)		-			(10,906	)		(10,906	)

Balance December 31, 2008		50,585,455	$	50,586	$	13,372,359		$	(12,200,289	)	$	320,858		$	1,543,514		$	6,637,631		$	8,181,145		$	(3,365,771	)

Cumulative effect of accounting change for warrants - Reclassification of warrants to warrant liabilities		-		-		(731,496	)		424,373			-			(307,123	)		-			(307,123	)

Shandong Media valuation adjustment		-		-		-			-			-			-			(275,448	)		(275,448	)

Shares issued as payment for convertible note interest		921,043		921		259,637			-			-			260,558			-			260,558

Stock option compensation expense		-		-		33,656			-			-			33,656			-			33,656

Shares issued for AdNet acquisition		11,254,898		11,255		1,676,980			-			-			1,688,235			-			1,688,235

Costs related to stock issued for AdNet acquisition		-		-		(3,622	)		-			-			(3,622	)					(3,622	)

Shares issued for cash		2,000,000		2,000		298,000			-			-			300,000			-			300,000

Costs related to stock issued for cash		-		-		(4,021	)								(4,021	)		-			(4,021	)

Comprehensive loss:
Net loss		-		-		-			(5,439,125	)		-			(5,439,125	)		(1,102,756	)		(6,541,881	)	$	(5,439,125	)
Foreign currency translation adjustments		-		-		-			-			28,345			28,345			-			28,345			28,345
Unrealized loss on marketable equity securities		-		-		-			-			(17,920	)		(17,920	)		-			(17,920	)		(17,920	)

Balance December 31, 2009		64,761,396	$	64,762	$	14,901,493		$	(17,215,041	)	$	331,283		$	(1,917,503	)	$	5,259,427		$	3,341,924		$	(5,428,700	)

See notes to consolidated financial statements.

F-4

China Broadband, Inc. and Subsidiaries

CONSOLIDATED STATEMENTS OF CASH FLOWS

Years Ended December 31, 2009 and 2008

	2009			2008
Cash flows from operating
Net loss	$	(6,541,881	)	$	(3,964,494	)
Adjustments to reconcile net loss to net cash provided by operating activities
Stock compensation expense and shares issued as payment for interest		294,213			318,818
Depreciation and amortization		3,578,309			3,369,930
Noncash interest expense - original issue discount		100,879			97,838
Deferred income tax		(243,655	)		423,945
Loss on sale and write-down of marketable equity securities		14,828			1,899,883
Goodwill impairment		1,239,291			-
Change in fair value of warrant liabilities		512,027			-
Settlement gain		-			(1,300,692	)
Change in assets and liabilities, net of amounts assumed in AdNet acquisition:
Accounts receivable		(77,004	)		(54	)
Inventory		421,817			(234,996	)
Prepaid expenses and other assets		(161,984	)		213,177
Accounts payable and accrued expenses		1,459,487			1,187,894
Deferred revenue		255,180			129,790
Other		-			(467,331	)
Net cash provided by operating activities		851,507			1,673,708

Cash flows from investing activities:
Cash acquired in AdNet acquisition		17,568			-
Proceeds from sale of marketable equity securities		174,504			361,121
Acquisition of property and equipment		(1,134,926	)		(2,061,401	)
Loan to Shandong Media shareholder		(104,513	)		(242,155	)
Loan to related party		(21,525	)		-
Net cash used in investing activities		(1,068,892	)		(1,942,435	)

Cash flows from financing activities
Proceeds from sale of equity securities		300,000			-
Proceeds from issuance of convertible notes payable		304,853			4,850,000
Legal fees associated with AdNet acquisition and share issuance		(7,643	)		-
Issuance costs associated with private placement and convertible notes		-			(104,500	)
Payments to Jinan Parent		(2,643,204	)		(512,971	)
Net cash (used in) provided by financing activities		(2,045,994	)		4,232,529

Effect of exchange rate changes on cash and cash equivalents		28,344			(10,903	)

Net (decrease) increase in cash and cash equivalents		(2,235,035	)		3,952,899
Cash and cash equivalents at beginning of period		4,425,529			472,670

Cash and cash equivalents at end of period	$	2,190,494		$	4,425,569

Supplemental Cash Flow Information:

Cash paid for taxes	$	-		$	-
Cash paid for interest	$	946		$	724
Value assigned to shares issued as penalty for non-registration of 7% convertible notes	$	-		$	12,125
Value assigned to shares as payment for interest expense	$	260,558		$	247,391
Convertible notes issued as payment for debt issuance costs	$	-		$	121,250

Cumulative effect of change in accounting principle upon adoption of new accounting pronouncement on January 1, 2009, reclassification of warrants from equity to warrant liabilities	$	424,373		$	-

See notes to consolidated financial statements.

F-5

CHINA BROADBAND, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

1.	Basis of Presentation

China Broadband, Inc., a Nevada corporation (“China Broadband”, “we,” “us,” or “the Company”), owns and operates in the media segment through its subsidiaries in the People’s Republic of China (“PRC” or “China”) (1) a cable broadband business, Beijing China Broadband Network Technology Co. Ltd (referred to as Jinan Broadband) and (2) a print based media and television programming guide publication, Shandong Lushi Media Co., Ltd. (referred to as Shandong Media). We have also recently acquired and are developing to a limited extent, an internet café advertising and content provider business in China.

(1) We provide cable and wireless broadband services, principally internet services, Internet Protocol Point wholesale services, related network equipment rental and sales, and fiber network construction and maintenance through its Jinan Broadband subsidiary based in the Jinan region of China.

(2) We operate a print based media and television programming guide publication business through our Shandong Newspaper joint venture based in the Shandong Province of China, effective as of July 1, 2008. The results of which are included in our financial statements as of July 2008.

Our subsidiary AdNet, which was acquired during the first half of 2009, holds an Internet Content Provider (“ICP”), license with rights to provide delivery of multimedia advertising content to internet cafés in the PRC. AdNet 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.

2.	Summary of Significant Accounting Policies

Principles of Consolidation

The consolidated financial statements include the accounts of China Broadband, Inc. and its wholly-owned subsidiaries, China Broadband Cayman, Beijing China Broadband Network Technology Co, Ltd. (WFOE), Jinan Broadband and Shandong Media. All material intercompany transactions and balances are eliminated in consolidation.

Accounting Method

Reportable Segment

The Company operates under one reportable business segment, media, for which segment disclosure is consistent with the management decision-making process that determines the allocation of resources and the measuring of performance.

Estimates

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

Accounts Receivable

Accounts receivable are recognized and carried at original invoiced amount less an allowance for any uncollectible accounts. For 2009, the Company estimated the amount of uncollectible accounts receivable to be $90,000 and accordingly recorded a charge to bad debt expense.

Inventory

Inventories, consisting of cables, fiber, connecting material, power supplies and spare parts are stated at the lower of cost or market value. Cost is determined using the weighted average method.

F-6

Marketable Equity Securites

The Company holds investments in certain “available-for-sale” marketable equity securities all of which consist of the Cablecom Holdings Shares. The Cablecom Holding Shares are classified as available-for-sale securities and are carried at estimated fair value, based on available information. In 2008 the Company recognized an other than temporary loss of $1,797,000 in interest and other income (expense).

During 2009 and 2008, the Company sold 236,665 and 71,880 Cablecom Holding Shares for gross proceeds of approximately $174,000 and $361,000, respectively. The Company recognized a net loss from the sale of these securities of approximately $15,000 and $103,000, respectively.

Property and Equipment

Impairment of Long-Lived Assets

Intangible Assets

The Company follows FASB ASC 350, Intangibles-Goodwill and Other, (ASC 350). ASC 350 requires that goodwill and intangible assets with indefinite useful lives no longer be amortized, but instead be tested for impairment at least annually. ASC 350 also requires that intangible assets with estimable useful lives be amortized over their respective estimated useful lives and reviewed for impairment whenever events indicate the carrying amount may not be recoverable.

In accordance with ASC 350, goodwill is allocated to reporting units, which are either the operating segment or one reporting level below the operating segment.

On an annual basis, we must test goodwill and other indefinite life intangible assets for impairment. To determine the fair value of these intangible assets, there are many assumptions and estimates used that directly impact the results of the testing. In making these assumptions and estimates, we will use set criteria that are reviewed and approved by various levels of management, and we will estimate the fair value of our reporting units by using discounted cash flow analyses and other valuation methods. At December 31, 2009 we recorded a goodwill impairment charge of $1,239,291 related to goodwill from our AdNet Acquisition.

Income Taxes

The Company is subject to a 5% business tax on the business income of our Jinan Broadband subsidiary. The Company accounts for income taxes in accordance with the asset and liability method. 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. A tax valuation allowance is established, as needed to reduce net deferred tax assets to the amount expected to be realized. The Company also follows applicable guidance for accounting for uncertainty in income taxes.

F-7

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

The Company recognizes accrued interest and penalties related to unrecognized tax benefits in the provision for income taxes in our consolidated statements of operation. The Company’s policy for recording interest and penalties associated with audits is to record such items as a component of income tax expense.

Revenue Recognition

Net Loss Per Share

Foreign Currency Translation

Exchange gains and losses resulting from accumulated losses are reported as a separate component of stockholders’ equity and are included in Comprehensive Loss.

Concentrations of Credit Risk

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

Fair value of Financial Instruments

The fair values of accounts receivable, prepaid expenses and accounts payable and accrued expenses are estimated to approximate the carrying values at December 31, 2009 due to the short maturities of such instruments.

Stock-Based Compensation

The Company awards stock options and other equity-based instruments to its employees, directors and consultants. and (collectively “share-based payments”). Compensation cost related to such awards is measured based on the fair value of the instrument on the grant date and is recognized on a straight-line basis over the requisite service period, which generally equals the vesting period. All of the Company’s stock-based compensation is based on grants of equity instruments and no liability awards have been granted.

Warrant Liability

Effective January 1,2009, we adopted the provisions of FASB ASC Topic 815, “Derivatives and Hedging” (“ASC 815”) (previously ElTF 07-5, “Determining Whether an Instrument (or an Embedded Feature) is Indexed to an Entity's Own Stock”). As a result of adopting ASC 815, warrants to purchase the Company's common stock previously treated as equity pursuant to the derivative treatment exemption were no longer afforded equity treatment as there was a down-round protection (full-ratchet down round protection). As a result, the warrants are not considered indexed to the Company's own stock, and as such, all future changes in the fair value of these warrants will be recognized currently in earnings until such time as the warrants are exercised or expire.

As such, effective January 1, 2009, the Company reclassified the fair value of these warrants from equity to liability, as if these warrants were treated as a derivative liability since their issuance in 2008.

Reclassifications

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

Recent Accounting Pronouncements

ASC 105. In June 2009, the Financial Accounting Standards Board (“FASB”) issued FASB Statement No. 168, The FASB Accounting Standards Codification and the Hierarchy of Generally Accepted Accounting Principles”, (“SFAS No. 168”) “— a replacement of FASB Statement No. 162. SFAS No. 168 is the new source of authoritative GAAP recognized by the FASB to be applied by nongovernmental entities. Rules and interpretive releases of the SEC under authority of federal securities laws are also sources of authoritative GAAP for SEC registrants. This statement was incorporated into ASC 105, Generally Accepted Accounting Principles under the new FASB codification which became effective on July 1, 2009. The new Codification supersedes all then-existing non-SEC accounting and reporting standards. All other non-grandfathered non-SEC accounting literature not included in the Codification will become non-authoritative. The Company has included the references to the Codification, as appropriate, in these consolidated financial statements. Adoption of this statement did not have an impact on the Company’s consolidated results of operations, cash flows or financial condition.

F-8

ASC 805. FASB Statement No. 141(R) Business Combinations was issued in December 2007. This statement was incorporated into ASC 805, Business Combinations, under the new FASB codification. ASC 805 requires that upon initially obtaining control, an acquirer should recognize 100% of the fair values of acquired assets, including goodwill and assumed liabilities, with only limited exceptions, even if the acquirer has not acquired 100% of its target. Additionally, contingent consideration arrangements will be fair valued at the acquisition date and included on that basis in the purchase price consideration and transaction costs will be expensed as incurred. This statement also modifies the recognition for pre-acquisition contingencies, such as environmental or legal issues, restructuring plans and acquired research and development value in purchase accounting. This statement amends ASC 740-10, Income Taxes (“ASC 740”) to require the acquirer to recognize changes in the amount of its deferred tax benefits that are recognizable because of a business combination either in income from continuing operations in the period of the combination or directly in contributed capital, depending on the circumstances. ASC 805 is effective for fiscal years beginning after December 15, 2008. The Company adopted this statement on January 1, 2009 and accounted for its acquisition in 2009 in accordance with the provisions of ASC 805.

ASC 805 Update. In February 2009, the FASB issued SFAS No. 141R-1, Accounting for Assets Acquired and Liabilities Assumed in a Business Combination That Arise from Contingencies, which allows an exception to the recognition and fair value measurement principles of ASC 805. This exception requires that acquired contingencies be recognized at fair value on the acquisition date if fair value can be reasonably estimated during the allocation period. This statement update was effective for the Company as of January 1, 2009 for all business combinations that close on or after January 1, 2009 and it did not have an impact on the Company’s consolidated results of operations, cash flows or financial condition.

ASC 810. In December 2007, the FASB issued FASB Statement No. 160, Non-controlling Interests in Consolidated Financial Statements — an amendment of ARB No. 51, which is effective for fiscal years beginning after December 15, 2008. Early adoption is prohibited. SFAS No. 160 was incorporated into ASC 810, Consolidation (“ASC 810”) and requires companies to present minority interest separately within the equity section of the balance sheet. The Company adopted this statement as of January 1, 2009 and it did not have an impact on the Company’s consolidated results of operations, cash flows or financial condition.

ASC 855. In May 2009, the FASB issued FASB Statement No. 165, Subsequent Events (“SFAS No. 165”). The statement establishes general standards of accounting for and disclosure of events that occur after the balance sheet date but prior to the issuance of financial statements. This statement was incorporated into ASC 855, Subsequent Events (“ASC 855”). This statement was effective for interim or annual reporting periods after June 15, 2009. ASC 855 sets forth the period after the balance sheet date during which management of a reporting entity should evaluate events or transactions that may occur for potential recognition or disclosure in the financial statements as well as the circumstances under which the entity would recognize them and the related disclosures an entity should make. This statement became effective for the Company’s financial statements as of June 30, 2009.

ASC 810. In June 2009, the FASB issued FASB Statement No. 167, Amendments to FASB Interpretation No. 46 (R) (“SFAS No. 167”), which amended the consolidation guidance for variable-interest entities. The amendments include: (1) the elimination of the exemption for qualifying special purpose entities, (2) a new approach for determining who should consolidate a variable-interest entity, and (3) changes to when it is necessary to reassess who should consolidate a variable-interest entity. This Statement is effective for financial statements issued for fiscal years periods beginning after November 15, 2009, for interim periods within that first annual reporting period and for interim and annual reporting periods thereafter. Earlier application is prohibited. The Company will adopt these provisions on January 1, 2010 and the adoption will not have an impact on the Company’s financial statements..

ASC 275 and ASC 350. In April 2008, the FASB issued FASB Staff Position (“FSP”) No. 142-3, Determination of the Useful Lives of Intangible Assets, which amends the factors that should be considered in developing renewal or extension assumptions used to determine the useful life of an intangible asset. Under the new codification this FSP was incorporated into two different ASC’s, ASC 275, Risks and Uncertainties (“ACS 275”) and ASC 350, Intangibles — Goodwill and Other (“ASC 350”). This interpretation was effective for financial statements issued for fiscal years beginning after December 15, 2008 and interim periods within those years. The Company adopted this FSP on January 1, 2009, and it did not have a material impact on the Company’s consolidated results of operations, cash flows or financial condition, and did not require additional disclosures related to existing intangible assets.

F-9

ASC 820. On February 12, 2008, the FASB issued FSP FAS 157-2, Effective Date of FASB Statement No. 157 (“FSP 157-2”), which delayed the effective date of SFAS No. 157 Fair Value Measurements, for nonfinancial assets and liabilities, except for items that are recognized or disclosed at fair value in the financial statements on a recurring basis (at least annually), to fiscal years beginning after November 15, 2008. Under the new codification the FSP was incorporated into ASC 820, Fair Value Measurements and Disclosures (“ASC 820”). The Company adopted this ASC update on January 1, 2009 and it did not have a material impact on the Company’s consolidated results of operations, cash flows or financial condition, and did not require additional disclosures.

ASC 820. FSP 157-4, FSP FAS 115-2 and FAS 124-2, and FSP FAS 107-1 and APB 28-1. On April 2, 2009, the FASB issued three FSPs to address concerns about measuring the fair value of financial instruments when the markets become inactive and quoted prices may reflect distressed transactions, recording impairment charges on investments in debt instruments, and requiring the disclosure of fair value of certain financial instruments in interim financial statements. These FSP’s were incorporated into ASC 820 under the new codification.

The first ASC update Staff Position, FSP FAS 157-4, “Determining Whether a Market is Not Active and a Transaction is Not Distressed”, provides additional guidance to highlight and expand on the factors that should be considered in estimating fair value when there has been a significant decrease in market activity for a financial asset. This update became effective for the Company’s financial statements as of June 30, 2009 and it did not have a material impact on the Company’s consolidated results of operations, cash flows or financial condition and did not require additional disclosures.

The second ASC update Staff Position, FSP FAS 115-2 and FAS 124-2, Recognition and Presentation of Other-Than-Temporary Impairments (“FSP 115-2 and FSP 124-2”), changes the method for determining whether an other-than-temporary impairment exists for debt securities and the amount of an impairment charge to be recorded in earnings. The Company adopted this update during the second quarter of 2009 and it did not have a material impact on the Company’s consolidated results of operations, cash flows or financial condition, and did not require additional disclosures.

The third ASC update, Staff Position, FSP FAS 107-1 and APB 28-1, Interim Disclosures about Fair Value of Financial Instruments (“FSP FAS 107-1 and APB 28-1”) increases the frequency of fair value disclosures from annual only to quarterly. All three updates are effective for interim periods ending after June 15, 2009, with the option to early adopt for interim periods ending after March 15, 2009. ASC update FSP FAS 107-1 and APB 28-1 became effective for the Company’s financial statements as of June 30, 2009.

ASC 260. In June 2008, the FASB issued FSP EITF 03-6-1, Determining Whether Instruments Granted in Share-Based Payment Transactions Are Participating Securities (“FSP EITF 03-6-1”). Under the new FASB codification this FSP was incorporated into ASC 260, Earnings Per Share (“ASC 260”). ASC 260 clarifies that unvested share-based payment awards that entitle holders to receive non-forfeitable dividends or dividend equivalents (whether paid or unpaid) are considered participating securities and should be included in the computation of earnings per share (“EPS”) pursuant to the two-class method. The Company does not currently have any share-based awards that would qualify as participating securities. Therefore, application of this FSP will not have an effect on the Company's financial reporting.

F-10

ASU 2010-06. The FASB issued ASU No. 2010-06 which provides improvements to disclosure requirements related to fair value measurements. New disclosures are required for significant transfers in and out of Level 1 and Level 2 fair value measurements, disaggregation regarding classes of assets and liabilities, valuation techniques and inputs used to measure fair value for both recurring and nonrecurring fair value measurements for Level 2 or Level 3. These disclosures are effective for the interim and annual reporting periods beginning after December 15, 2009. Additional new disclosures regarding the purchases, sales, issuances and settlements in the roll forward of activity in Level 3 fair value measurements are effective for fiscal years beginning after December 15, 2010 beginning with the first interim period. The adoption of these provisions did not have an effect on the Company’s financial reporting.

In May 2008, the FASB issued ASC 470-20, Debt with Conversion and Other Options (ASC 470-20). ASC 470-20 will be effective for financial statements issued for fiscal years beginning after December 15, 2008. The FSP includes guidance that convertible debt instruments that may be settled in cash upon conversion should be separated between the liability and equity components, with each component being accounted for in a manner that will reflect the entity's nonconvertible debt borrowing rate when interest costs are recognized in subsequent periods.. Adoption of this statement did not have an impact on the Company’s consolidated results of operations, cash flows or financial condition.

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.

3.	Going Concern and Management’s Plans

The Company has incurred significant losses during 2008 and 2009 and has a working capital deficit at December 31, 2009 and has relied on debt and equity financings to fund operations. These conditions raise susbstantial doubt about the Company’s ability to continue as a going concern.

The consolidated financial statements have been prepared assuming that the Company will continue as a going concern and, accordingly, do not include any adjustments that might result from the outcome of this uncertainty. The Company has limited cash resources and management continues its efforts to raise additional funds through debt or equity offerings. The Company continues to evaluate what type of offering the Company will use, how much capital the Company will raise and which company it will merge with or acquire. There is no guarantee that the Company will be able to raise any capital through any type of offerings or merge with or acquire any other companies.

4.	Acquisition of AdNet

Effective as of April 7, 2009, China Broadband, through its wholly owned subsidiary China Broadband, Ltd., a Cayman Islands company (“China Broadband Cayman”) completed the acquisition (the “AdNet Acquisition”) of Wanshi Wangjing Media Technologies (Beijing) Co., Ltd., a/k/a Adnet Media Technologies (Beijing) Co., Ltd., a recently organized development stage PRC based company (“AdNet”) pursuant to a Share Issuance Agreement (the “AdNet Agreement”) between the Company, China Broadband Cayman, AdNet and its 10 shareholders (inclusive of its two executives, Ms. Priscilla Lu and Mr. Wang Yingqinee Michael Wang).

Pursuant to the terms of the AdNet Agreement, among other provisions, China Broadband issued 11,254,898 shares of its common stock, par value, $.001 per share (the “Broadband Shares”) to the AdNet shareholders, in exchange for 100% of the equity ownership of AdNet (the “AdNet Shares”) and cash consideration of $100,000. The acquisition of AdNet resulted in the ownership by AdNet shareholders of 15% of China Broadband’s common stock on a fully diluted basis (exclusive of certain notes and warrants).

F-11

The fair value of the Broadband Shares issued in the AdNet Acquisition totaled $1,688,235. The fair value of these shares was determined to be $.15 per share based on the sale of shares sold at $.15 per share in the private equity transactions that occurred in the same period.

The purchase price has been allocated to each major class of identifiable assets acquired and liabilities assumed based upon their estimated fair values at the date of the acquisition. The Company initially recorded a $1,900,000 intangible asset related to the AdNet Acquisition. Since then we have completed our valuation and the following represents the allocation of the purchase price.

Adnet
Cash	$	17,568
Due from former AdNet shareholders		100,000
Property and equipment		6,986
Other assets		18,935
Software technology		756,969
Loan payable		(199,358	)
Accounts payable		(5,478	)
Accrued expenses		(53,229	)
Other current liabilities		(4,207	)
Deferred tax liability		(189,242	)
Net identifiable assets and liabilities	$	448,944
Goodwill		1,239,291
Consideration paid	$	1,688,235

The purchase price allocation for acquisitions requires extensive use of accounting estimates and judgments to allocate the purchase price to the identifiable tangible and intangible assets acquired and liabilities assumed based on their respective fair values.

AdNet holds an Internet Content Provider (“ICP”) license with the rights to provide delivery of multimedia advertising content to internet cafés in China. AdNet 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. Due to the shift of our business model to the PPV / VOD business, as of December 31, 2009 we temporarily suspended day to day operations of AdNet. We have maintained our licenses, contracts, technology and other assets for future use in our new PPV business. Consequently, we recorded an impairment charge to goodwill of $1,239,291.

5.	Shandong Media Joint Venture - Cooperation Agreement and Additional Payment

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.

F-12

Based on certain financial performance we were required to make an additional payment of 5 million RMB (approximately US $730,000). In 2008 we recorded the additional payment due as an increase to our Shandong noncontrolling interest account. The due date of the additional payment has been extended to May 31, 2010.

6.	Variable Interest Entities

Financial accounting standards require the “primary beneficiary” of a VIE to include the VIE’s assets, liabilities and operating results in its consolidated financial statements. In general, a VIE is a corporation, partnership, limited-liability company, trust or any other legal structure used to conduct activities or hold assets that either (a) has an insufficient amount of equity to carry out its principal activities without additional subordinated financial support, (b) has a group of equity owners that are unable to make significant decisions about its activities, or (c) has a group of equity owners that do not have the obligation to absorb losses or the right to receive returns generated by its operations.

Our consolidated VIEs were recorded at fair value on the date we became the primary beneficiary. Our VIEs at December 31, 2009 include Jinan Broadband and Shandong Media.

7.	Fair Value Measurements

Accounting standards require the categorization of financial assets and liabilities, based on the inputs to the valuation technique, into a three-level fair value hierarchy. The various levels of the fair value hierarchy are described as follows:

Level 1 — Financial assets and liabilities whose values are based on unadjusted quoted market prices for identical assets and liabilities in an active market that we have the ability to access.

Level 2 — Financial assets and liabilities whose values are based on quoted prices in markets that are not active or model inputs that are observable for substantially the full term of the asset or liability

Level 3 — Financial assets and liabilities whose values are based on prices or valuation techniques that require inputs that are both unobservable and significant to the overall fair value measurement.

Accounting standards require the use of observable market data, when available, in making fair value measurements. When inputs used to measure fair value fall within different levels of the hierarchy, the level within which the fair value measurement is categorized is based on the lowest level input that is significant to the fair value measurement.

The following table presents the fair value hierarchy for those assets and liabilities measured at fair value on a recurring basis as of December 31:

F-13

	2009
	Fair Value Measurements
	Level 1		Level 2		Level 3		Total Fair Value
Assets
Available-for-sale securities	$	47,244	$	-	$	-	$	47,244
Liabilities
Fair value of warrants	$	-	$	-	$	819,150	$	819,150

	2008
	Fair Value Measurements
	Level 1		Level 2		Level 3		Total Fair Value
Assets
Available-for-sale securities	$	254,496	$	-	$	-	$	254,496

8.	Related Party Transactions

Loan Receivable

During 2009, the Company advanced and aggregate of approximately $290,000 in the form of a loan to Music Magazine to fund its operations. The loan is unsecured, interest free and is due on December 31, 2010. Music Magazine is related through Modern Movie Times Magazine.

Amounts due from Shareholders

Amounts due from shareholders include $109,000 advanced to Shandong Broadcast & TV Weekly Press and $60,000 advanced to Modern Movie & TV Biweekly Press. Both companies are our partners in our Shandong Media joint venture company. The amount due from Shandong Broadcast & TV Weekly Press is unsecured, interest free and has no fixed repayment terms. The amount due from Modern Movie & TV Biweekly Press is unsecured, interest free and is due on December 31, 2010. During the year ended December 31, 2009, we advanced approximately $650,000 to these companies and also received repayments of $481,000.

Payable to Jinan Parent

During the fiscal year ended 2009, Jinan Broadband paid $2,643,000 to Jinan Parent. At December 31, 2009, $152,000 remains due to Jinan Parent. This amount represents the remaining balance due from the initial acquisition which is unsecured, interest free and has no fixed repayment terms.

9.	Property and Equipment

Property and equipment at December 31, 2009 and 2008 consisted of the following:

	2009			2008

Furniture and office equipment	$	984,000		$	835,000
Headend facilities and machinery		14,172,000			13,177,000
Vehicles		30,000			27,000
Total property and equipment		15,186,000			14,039,000
Less: accumulated depreciation		(7,823,000	)		(4,740,000	)
Net carrying value	$	7,363,000		$	9,299,000

Depreciation expense	$	3,068,000		$	2,800,000

10.	Goodwill and Other Intangible Assets

In the fourth quarter of 2009 the Company decreased the value of our intangible assets by reclassifying approximately $279,000 from noncontrolling interest. The reclassification was made to correct an error related to the valuation of our Shandong Media intangibles which includes our publication rights, operating permits and customer relationships. The Company assessed the impact of this adjustment on the current year and all prior periods and determined that the effect of this adjustment was not material to the full year 2009 results and did not result in a material misstatement to any previously issued annual or quarterly financial statements.

F-14

In 2008 we made an adjustment to the original purchase price allocation of our Jinan service agreement which was permitted under ASC 805, to adjust the deferred taxes related to the service agreement for approximately $324,000.

The Company amortizes its service agreement, publication rights, operating permits, customer relationships and software technology that have finite lives. Our service agreement, publication rights and operating permits are amortized over 20 years. Customer relationships are amortized over 10 years and our software technology is amortized over 3 years.

We have intangible assets relating to the acquisition of our Jinan Broadband subsidiary, Shandong Media joint venture and AdNet Media acquisition.

	Balance at				Amortizaton /						Balance at
	December 31,				Impairment			Other			December 31,
	2008		Additions		Charge			Changes			2009
Amortized intangible assets:
Service agreement	$	1,570,482	$	-	$	(86,720	)	$	-		$	1,483,762
Publication rights		968,977		-		(42,250	)		(101,915	)		824,812
Customer relationships		228,933		-		(20,491	)		(24,712	)		183,730
Operating permits		1,450,366		-		(63,236	)		(152,547	)		1,234,583
Software technology		-		756,969		(189,242	)		-			567,727
Total amortized intangible assets	$	4,218,758	$	756,969	$	(401,939	)	$	(279,174	)	$	4,294,614

Unamortized intangible assets:
Goodwill	$	-	$	1,239,291	$	(1,239,291	)	$	-		$	-

	Balance at				Amortizaton /						Balance at
	December 31,				Impairment			Other			December 31,
	2007		Additions		Charge			Changes			2008
Amortized intangible assets:
Service agreement	$	1,981,307	$	-	$	(86,719	)	$	(324,106	)	$	1,570,482
Publication rights		-		993,823		(24,846	)		-			968,977
Customer relationships		-		240,982		(12,049	)		-			228,933
Operating permits		-		1,487,555		(37,189	)		-			1,450,366

Total amortized intangible assets	$	1,981,307	$	2,722,360	$	(160,803	)	$	(324,106	)	$	4,218,758

In accordance with ASC 250, we recorded amortization expense of approximately $402,000 in 2009. In 2008, we recorded amortization expense of approximately $161,000 related to our intangible assets.

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

	Jinan		Shandong		AdNet
	Broadband		Media		Media		Total
2010	$	86,720	$	132,934	$	252,323	$	471,977
2011		86,720		132,934		252,323		471,977
2012		86,720		132,934		63,081		282,735
2013		86,720		132,934		-		219,654
2014		86,720		132,934		-		219,654
Thereafter		1,050,161		1,578,455		-		2,628,616
Total amortization to be recognized	$	1,483,762	$	2,243,125	$	567,727	$	4,294,614

The Company initially recorded a $1,900,000 intangible asset related to the AdNet Acquisition. After completion of our purchase accounting for the AdNet acquisition, we recorded $1,239,291 to goodwill and $756,969 to software technology. For reasons noted in footnote 4 above, we recorded an impairment charge to goodwill of $1,239,291 as of December 31, 2009.

11.	Accrued Expenses

Accrued expenses at December 31, 2009 and 2008 consist of the following:

	2009		2008
Accrued expenses	$	1,053,000	$	543,000
Accrued payroll		786,000		393,000
	$	1,839,000	$	936,000

12.	Private Financings, June 2009

During the year ended December 31, 2009, we completed a private placement transaction and sold 5% Convertible Promissory Notes, or the 2009 Notes, for gross proceeds of approximately $305,000 and an aggregate of 2,000,000 shares of our common stock at a purchase price of $.15 per share, for aggregate proceeds of $300,000. The Notes accrue interest at 5% per year payable quarterly in cash or stock, are initially convertible at $.20 per share, and become due and payable in full on May 27, 2010. The Company did not pay any placement agent or similar fees in connection with the Note Offering.

F-15

In connection with the 2009 private placement, we entered into a waiver letter with all the holders of January 2008 Notes, pursuant to which, among other things, the conversion price of the January 2008 Notes were reduced from $.75 per share to (i) $.20 per share for existing note holders that invested in the 2009 private placement and (ii) $.25 per share for those that did not participate. All of the existing note holders waived certain anti dilution adjustments contained in the January 2008 Notes and the Class A Warrants in exchange for the above changes.

13.	Convertible Notes, January 2008

On January 11, 2008, we completed a private placement transaction and sold an aggregate of $4,971,250 principal amount of notes due January 11, 2013, or the January 2008 Notes, and Class A Warrants to purchase an aggregate of 6,628,333 shares of our common stock, at $.60 per share and expiring on June 11, 2013. The conversion price of these January 2008 Notes was originally $.75 per share and, in June of 2009 in connection with a subsequent financing with these investors, reduced to $.20 per share (see “Private Financings; June 2009 – Waiver Letters” above). One investor had his conversion price reduced to $.25 per share. We recorded a $504,661 original issue discount related to the Notes. We calculate the interest at 5% annually and issued shares for interest payments on a quarterly basis. We recorded amortization of original issue discount as interest expense of $100,879 and $97,838 for the years ended December 31, 2009 and 2008, respectively.

The convertible notes due are as follows at Decmeber 31:

		2009			2008
Convertible notes	$	4,971,250		$	4,971,250
Less: Original issue discount		(305,944	)		(406,823	)
	$	4,665,306		$	4,564,427

14.	Warrant Liability

In June 2008, the FASB issued authoritative guidance on determining whether an instrument (or embedded feature) is indexed to an entity’s own stock. Under the authoritative guidance, effective January 1, 2009, instruments which do not have fixed settlement provisions are deemed to be derivative instruments. Certain issued by the Company , do not have fixed settlement provisions because their exercise prices may be lowered if the Company issues securities at lower prices in the future. The Company was required to include the reset provisions in order to protect the holders from potential dilution associated with future financings. The warrants have been characterized as derivative liabilities to be re-measured at the end of every reporting period with the change in value reported in the statement of operations.

The derivative liabilities were valued using The Black-ScholesMerton model which incorporates the following assumptions:

	December 31,			January 1,
	2009			2009
Risk-free interest rate		1.50	%		1.30	%
Expected volatility		309.62	%		311.69	%
Expected life (in years)	3.4 years			4.4 years
Expected dividend yield	0			0

The FASB authoritative guidance was adopted as of January 2009 and is reported as a cumulative change in accounting principles. The cumulative effect on the accounting for the warrants at January 1, 2009 was as follows:

	Additional			Accumulated			Derivative
	Paid-in Capital			Deficit			Liability
Warrants	$	(731,496	)	$	(424,373	)	$	307,123

The warrants were originally recorded at their relative fair value as an increase in additional paid-in capital. The decrease in the accumulated deficit includes gains resulting from decreases in the fair value of the derivative liabilities through December 31, 2008. The derivative liability amount reflects the fair value of the derivative instrument from issuance date as of the January 1, 2009 date of implementation.

F-16

15.	Net Loss Per Common Share

Basic net loss per common share is calculated by dividing the net loss by the weighted average number of outstanding common shares during the period. Diluted net loss per common share includes the weighted average dilutive effect of stock options and warrants.

Potential common shares outstanding as of December 31, 2009 and 2008:

Warrants			16,874,800
Options			317,500

For the year ended December 31, 2009 and 2008, the number of securities not included in the diluted EPS because the effect would have been anti-dilutive was 17,192,300.

16.	Comprehensive Income/(Loss)

Comprehensive income/(loss) consists of the following:

	2009			2008
Net loss attributable to shareholders	$	(5,439,125	)	$	(3,354,865	)
Other comprehensive income (loss):
Foreign currency translation adjustment		28,345			(10,906	)
Unrealized loss on marketable equity securities		(17,920	)		-
Comprehensive loss	$	(5,428,700	)	$	(3,365,771	)

17.	Settlement Agreement

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, Jaguar Acquisition Corporation, and China Cablecom Holdings, Ltd, pursuant to which the parties released certain potential claims against one another.

The following represents the details of the net gain the Company recognized as a result of the Settlement Agreement during the fiscal year ended December 31, 2008 which is classified within “Interest and other income (expense)” in the accompaning Statement of Operations:

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

Net gain	$	1,300,692

18.	Interest Expense and Share Issuance

In connection with the Convertible Notes issued in January 2008 and June 2009 as described above in Notes 12 and 13, during the fiscal years ended December 31, 2009 and 2008 the Company incurred $362,000 and $346,000 in interest expense related to these Notes and Warrants, respectively.

As set forth in the related documents and with the consent of the Note holders, we issued 921,040 and 329,856 shares to the Note holders in lieu of cash of approximately $260,000 and $247,000 for interest in the fiscal years ended December 31, 2009 and 2008, respectively.

F-17

19.	Stock Based Compensation

In March 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. Through December 31, 2009, 317,500 options have been issued under the plan and 2,182,500 shares remain available to be issued.

The following table provides the details of the total stock based compensation for the fiscal years ended December 31, 2009 and 2008:

	Year Ended
	December 31,		December 31,
	2009		2008
Stock option amortization	$	33,656	$	44,898
Warrant amortization		-		14,198
Stock issued in lieu of interest		260,558		247,391
Stock issued as nonregistration penalty		-		12,125
	$	294,214	$	318,612

The Company accounts for its stock option awards pursuant to the provisions of ASC 718, Stock Compensation.

Expected volatility - the Company estimates the volatility of common stock at the date of grant using historical volatility.

Expected term - the Company estimates the expected term of options granted based on a combination of vesting schedules, term of the option and historical experience.

Risk-free interest rate - the Company estimates the risk-free interest rate using the U.S. Treasury yield curve for periods equal to the expected term of the options in effect at the time of grant.

Dividends - the Company uses an expected dividend yield of zero. The Company intends to retain any earnings to fund future operations and, therefore, does not anticipate paying any cash dividends in the foreseeable future.

The following table outlines the assumptions used in the Black-Scholes option-pricing model for the year ended December 31, 2008:

	2008
Risk free interest rate		3.53	%
Volatility		188.76	%
Dividend yield		-
Expected option life	4 years

We issued 317,500 stock options in 2008 and no stock options were issued in 2009. As of December 31, 2009, there were 317,500 options outstanding with 230,000 options exercisable at a weighted average exercise price of $0.61 with a weighted average remaining life of 5.0 years.

As of December 31, 2009 the Company had total unrecognized compensation expense related to options granted of $35,000 which will be recognized over a remaining service period of 2 years.

20.

Warrants

In connection with the Company’s Share Exchange, capital raising efforts in 2007 and the Company’s January 2008 Financing of Convertible Notes and Class A Warrants, the Company issued warrants to investors and service providers to purchase common stock of the Company. The following table outlines the warrants outstanding as of December 31, 2009 and 2008:

	Number of
	Warrants		Exercise		Expiration
Name	Issued		Price		Date

Share Exchange Consulting Warrants		4,474,800	$	0.60	1/11/2013
2007 Private Placement Broker Warrants		640,000	$	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	6/11/2013
January 2008 Financing Broker Warrants		1,131,667	$	0.50	6/11/2013

		16,874,800

F-18

21.	Income Taxes

Deferred taxes are recognized for the future tax consequences attributable to temporary differences between the carrying amounts of assets and liabilities for financial statement purposes and income tax purposes using enacted rates expected to be in effect when such amounts are realized or settled. The effect on deferred taxes of a change in tax rates is recognized in income in the period that includes the enactment date. The income tax benefit for the years ended December 31, 2009 and 2008 results from changes in calculated deferred taxes, particularly liabilities associated with intangible assets. Deferred tax assets associated with net operating losses have a full valuation allowance recorded against them.

Management believes that it has $6,706,453 of pre-exchange transaction net operating loss carryovers that expire in various years through 2025. Since Management has not been able to determine whether income tax returns were filed prior to the January 23, 2007 merger transaction and may not be able to recreate the records to file them if they have not they may be unable to claim the net operating loss carryovers. In addition, even if the net operating loss carryovers were to be properly established, the future use of any pre-exchange transaction net operating loss carryovers will be significantly limited under section 382 of the internal revenue code because of the change of control in January 2007 as well as by previous changes in the control of the Corporate entity. The extent of these limitations has not yet been determined.

As of December 31, 2009 the Company has available additional U.S. net operating loss carryovers of $1,439,883 which equals $3,168,207 shown on the tax returns less $1,728,324 resulting from the nonrecognition for financial reporting purposes of the tax benefits of certain a tax position taken by the Company because of the uncertainty of the position being sustained. The net operating loss carryovers expire in the years 2027 through 2029. The nonrecognition of the tax benefits, while reducing the net operating loss carryovers, gives rise to a capital loss carryover of $1,255,495 and an AMT credit of $17,602. Jinan Broadband, Shandong Media and AdNet Media have the following estimated Chinese net operating loss carryovers at December 31, 2009 with the expiration dates as shown:

	Jinan		Shandong		AdNet
Expiring	Broadband		Media		Media		Total

2012	$	373,572	$	-	$	-	$	373,572
2013		406,885		86,199		-		493,084
2014		1,087,565		174,576		423,319		1,685,460
	$	1,868,022	$	260,775	$	423,319	$	2,552,116

The estimation of the income tax effect of any future repatriation of the Company’s 51% share of any profits generated by its interests in Jinan Broadband, Shandong Media and AdNet is not practicable. This is because it may involve additional Chinese taxation on the distributions, or sale proceeds, to the extent that they are in excess of the investments made, but with credits for some or all of the Chinese taxes against U.S. taxes, plus the utilization of operating losses of the WFOE. All of the foregoing would be subject to various tax-planning strategies.

F-19

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

The Company’s income tax benefit for the year ended December 31, 2009 consisted entirely of foreign deferred taxes arising from net operating loss carryforwards.

The Company’s United States income tax returns are subject to examination by the Internal Revenue Service (“IRS”) for at least 2006 and later years. Because of the uncertainty regarding the filing of tax returns for earlier years it is possible that the Company is subject to examination by the IRS for earlier years. All of the Chinese tax returns for the Chinese operating companies are subject to examination by the Chinese tax authorities for all periods from the companies’ inceptions in 2007, 2008 and 2009 as applicable.

The following is a reconciliation of the beginning and ending amounts of unrecognized tax benefits:

Balance, beginnning of year	$	-
Increase from prior years' tax positions		18,577
Balance, end of year	$	18,577

The Company's deferred tax assets and liabilities at December 31, 2009 and 2008 consisted of:

	2009			2008
Deferred tax assets
U.S. NOL - pre-stock exchange transaction	$	2,280,194		$	2,280,194
U.S. NOL - subsequent to stock exchange transaction		489,560			510,082
Foreign NOL		674,694			219,379
Deferred revenue		393,114			345,526
Fixed assets cost basis		613,727			409,876
Accrued payroll		259,596			133,716
Nonqualified options		9,214			-
Marketable securities		144,705			-
AMT credit		17,952			-
Capital loss carryover		426,855			-
Total deferred tax assets		5,309,611			3,898,773
Less: valuation allowance		(4,912,026	)		(3,649,485	)
Deferred tax liability - intangible assets		(1,115,212	)		(1,039,905	)
Net deferred tax liability	$	(717,627	)	$	(790,617	)

The deferred tax valuation allowance increased $1,262,541 and $899, 352 during the years ended December 31, 2009 and 2008, respectively.

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

	2009			2008
Net loss before income taxes	$	(6,785,536	)	$	3,870,498

Expected income tax benefit at 34%		(2,307,082	)		(1,315,973	)

Nondeductible expenses		651,508			273
Rate-differential on foreign income invested indefinitely		316,498			135,132
WFOE NOL not recognized for indefinite reversal		9,741			12,681
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		1,262,541			899,352
Change in estimates		(195,438	)		-
Unrecognized tax benefits		18,577			-
Income tax expense (benefit)	$	(243,655	)	$	93,997

22.	Reclassifications

Certain prior year information has been reclassified to be comparable with the current year presentation, principally due to the adoption of ASC 810, Consolidation.

In presenting the Company’s consolidated balance sheet at December 31, 2008, and statement of cash flows for the year ended December 31, 2008, the Company presented $268,449 loan receivable from related party and $64,394 amounts due from shareholders as other long term assets and $242,155 as operating cash flows. In presenting the Company’s consolidated balance sheet at December 31, 2009, and statement of cash flows for the year ended December 31, 2009, the Company has reclassified the loan receivable from related party and amounts due from shareholders as current assets and their cash flows as investing cash flows in the accompanying December 31, 2009 financial statements.

23.	Non-Controlling Interests

In December 2007, the FASB issued authoritative guidance which establishes reporting standards that require companies to more clearly identify in the financial statements and disclose the impact of noncontrolling interests in a consolidated subsidiary on the consolidated financial statements. Noncontrolling interests are now classified as equity in the financial statements. The consolidated income statement is presented by requiring net income to include net income for both the parent and the noncontrolling interests, with disclosure of both amounts on the consolidated statements of income. The calculation of earnings per share continues to be based on income amounts attributable to the parent. Prior period amounts related to noncontrolling interests have been reclassified to conform to the current period presentation. The Company adopted this guidance on January 1, 2009.

F-20

24.	Subsequent Events

The LOI summarizes the proposed terms of the acquisition by CB Cayman of 100% of the outstanding capital stock of Sinotop Hong Kong from its sole stockholder in consideration for a percentage of China Broadband to be determined in the definitive agreement. Among other customary closing conditions, the acquisition is contingent upon the (1) the drafting and negotiation of definitive agreements that cover the matters discussed in the LOI, (2) the funding of the Note (as defined below), which has already occurred, (3) the contribution by CB Cayman of at least $5,000,000 to the capital of Sinotop Hong Kong (or the purchase by CB Cayman of newly issued shares of Sinotop Hong Kong in consideration for the same amount), and (4) the absence of any debts, obligations or encumbrances on the equity or assets of Sinotop Hong Kong and the WFOE other than the Note and the VIE Contracts. The LOI contains a binding exclusivity provision that prohibits Sinotop Hong Kong and Sinotop Hong Kong’s sole stockholder from soliciting, initiating, entertaining, participating in any discussions or negotiations concerning, or making or accepting any offer or proposed transaction with any third party with regard to, any of the transactions contemplated by the LOI or any similar transaction. This transaction has not been consummated yet and we are dependent on our ability to raise capital in order to complete this transaction.

F-21

EXHIBIT INDEX

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 of the Company, as amended to date.*
3.2		Bylaws of the Company, as amended to date.*
4.1		Form of Note Purchase Agreement, dated June 30, 2009, among the Company and certain investors. [Incorporated by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K filed on July 6, 2009]
4.2		Form of 5% Convertible Promissory Note, issued as of June 30, 2009. [Incorporated by reference to Exhibit 4.2 to the Company’s Current Report on Form 8-K filed on July 6, 2009]
4.3		Form of 5% Convertible Promissory Note, issued as of January 11, 2008. [Incorporated by reference to Exhibit 4.2 to the Company’s Current Report on Form 8-K filed on January 17, 2008]
4.4		Form of Class A Warrant, issued as of January 11, 2008. [Incorporated by reference to Exhibit 10.5 to the Company’s Current Report on Form 8-K filed on January 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 by reference to Exhibit 4.2 to the Company’s Current Report on Form 8-K 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 Funds Escrow Agreement, dated January 11, 2008, by and among the Company, Grushko and Mittman, P.C., and investors. [Incorporated by reference to Exhibit 10.4 to the Company’s Current Report on Form 8-K filed on January 17, 2008]
10.5		Settlement Agreement, dated January 11, 2008, by and among 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 by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on January 17, 2008]

Exhibit No.		Description
10.6		Form of Subscription and Release Agreement, dated March 2008 [Incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on May 8, 2008]
10.7		Form of Release Agreement, dated March 2008 [Incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed on May 8, 2008]
10.8		Form of Subscription Agreement, dated January 23, 2007, by and among the Company and certain investors. [incorporated by reference to Exhibit 10.3 to the Company’s Current Report on Form 8-K filed March 20, 2007]
10.9		Cooperation Agreement dated as of December 26, 2006 between China Broadband, Ltd. and Jianan Guangdian Jiahe Digital Television Co., Ltd. [incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed March 20, 2007]
10.10		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 to Exhibit 10.11 to the Company’s Current Report on Form 8-K filed June 11, 2007]
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 by reference to Exhibit 10.1 to the 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.*
10.15		Pledge Agreement, dated as of April 7, 2009, between China Broadband, Ltd. and Wangjing Media Technologies (Beijing) Co., Ltd.*
10.16		Trustee Appointment Letter, dated as of April 7, 2009, by China Broadband, Ltd., appointing Mr. Wang Yingqi as trustee on its behalf*
10.17		Employment Agreement, dated January 24, 2007, between China Broadband, Ltd. and Clive Ng. [incorporated by reference to Exhibit 10.6 to the Company’s Current Report on Form 8-K filed March 20, 2007]
10.18		Employment Agreement Amendment, dated January 11, 2008, between China Broadband, Ltd. and Clive Ng. [Incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed on January 17, 2008]
10.19		Employment Agreement, dated January 24, 2007, between China Broadband, Ltd. and Pu Yue. [incorporated by reference to Exhibit 10.8 to the Company’s Current Report on Form 8-K filed March 20, 2007]
10.20		Employment Agreement Amendment, dated January 11, 2008, between China Broadband, Ltd. and Pu Yue. [Incorporated by reference to Exhibit 10.3 to the Company’s Current Report on Form 8-K filed on January 17, 2008]
10.21		Employment Agreement, dated March 13, 2008, between the Company and Marc Urbach. [incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed March 13, 2008]
10.22		Consulting Agreement, dated January 24, 2007, between the Company and Maxim Financial Corporation. [incorporated by reference to Exhibit 10.9 to the Company’s Amended Current Report on Form 8-K/A filed June 4, 2007]
21		Subsidiaries of the Company.*
31.1		Certifications of Principal Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.*

Exhibit No.		Description
31.2		Certifications of Principal Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.*
32.1		Certification of Principal Executive Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.*
32.2		Certification of Principal Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.*
99.1		China Broadband, Inc. 2008 Stock Incentive Plan. [incorporated by reference to Exhibit 99.1 to the Company’s Current Report on Form 8-K filed March 13, 2008]
99.2		China Broadband, Inc. Audit Committee Charter [incorporated by reference to Exhibit 99.2 to the Company’s Annual Report on Form 10-K filed April 15, 2009]
99.3		China Broadband, Inc. Nominating and Corporate Governance Committee Charter [incorporated by reference to Exhibit 99.3 to the Company’s Annual Report on Form 10-K filed April 15, 2009]
99.4		China Broadband, Inc. Compensation Committee Charter [incorporated by reference to Exhibit 99.4 to the Company’s Annual Report on Form 10-K filed April 15, 2009]

*Filed herewith

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~~

~~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.~~copyrights.

~~Description~~	·	~~License/Permit~~
~~PRC Newspaper Publication License for~~ Shandong Broadcast and TV Weekly (Newspaper). Established in 1954, 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~~ is a provincial TV programming guide & ~~TV Biweekly~~		~~Ruqichu No:1318~~
~~Advertising License for~~general entertainment newspaper. Published on weekly basis, it has maintained 90,000 average copies in circulation per week. Target readership of Shandong Broadcast & TV Weekly		~~3700004000093~~
~~Advertising License for View Weekly~~ ~~Advertising License for Modern Movie & TV Biweekly~~		~~3700004000186~~ ~~3700004000124~~ consists primarily of middle-age to senior readers in the Shandong region.

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

			~~Page~~
PART I

Item 1.	Business	1
Item 1A.	Risk Factors	8
Item 1B.	Unresolved Staff Comments	20
Item 2.	Properties	1820
Item 3.	Legal Proceedings	1820
Item 4.	Submission of Matters to a Vote of Security Holders	1820

PART II			19

Item 5.	Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	1920
Item 6.	Selected Financial Data	2021
Item 7.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	2122
Item 7A.	Quantitative and Qualitative Disclosures ~~about~~About Market Risk	33
Item 8.	Financial Statements and Supplementary Data	3433
Item 9.	Changes in and Disagreements with Accountants on Accounting and Financial ~~Disclosures~~Disclosure	3533
Item ~~9A.~~9A(T).	Controls and Procedures	34
Item 9B.	Other Information	35

PART III			37

Item 10.	Directors, Executive Officers and Corporate Governance	3735
Item 11.	Executive Compensation	4138
Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	4240
Item 13.	Certain Relationships and Related Transactions, and Director Independence	4342
Item 14.	Principal Accounting Fees and Services	4543

PART IV

Item 15.	Exhibits, Financial Statement Schedules	4643

Function		Number of Employees
Sales and Marketing		50
Technical		84
Research and Development		15
Financial		15
Administrative		35
TOTAL		199

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

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		3700004000186
Advertising License for Modern Movie & TV Biweekly		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

	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

Stock issued for consulting services	$	-	$	208,699
Stock option amortization		44,898		-
Warrant amortization		14,198		-
Stock issued in lieu of interest		247,391		-
Stock issued as non registration penalty		12,125		-


	$	318,612	$	208,699

	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		250,000		0.67		6.50

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

												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		-

			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	(11)		6.0	%
		All Directors and Executive Officers		26,530,290			52.4	%