UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 20-F/A

(Amendment No. 1)

¨	REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934

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

For the fiscal year ended December 31, 2010.

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

¨	SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

for the transition period from __________ to ___________

Commission file number 001-34136

China Cablecom Holdings, Ltd.

(Exact name of the Registrant as specified in its charter)

British Virgin Islands

(Jurisdiction of incorporation or organization)

Room 458, North Building, Wenjiao Plaza

No. 1 Qingnian Dong Road

Jinan, People’s Republic of China 250001

(Address of principal executive offices)

Debra Chen, 212-837-7798; ir@chinacablecom.net;

80 Broad Street, 5th floor, New York, NY 10004

(Name, Telephone, E-mail and/or Facsimile Number and Address of Company Contact Person)

Securities registered or to be registered pursuant to Section 12(b) of the Act:

Title of Each Class

Name of each exchange on which registered

Securities registered or to be registered pursuant to Section 12(g) of the Act: ORDINARY SHARES, $.0015 PAR VALUE

Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act: None

On December 31, 2010, the registrant had 11,373,241 ordinary shares outstanding.

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.

¨ Yes x No

If this report is an annual or transition report, indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934.

¨ Yes x No

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

x Yes ¨ No

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

¨ Yes x No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer or a non-accelerated filer. See definition of “accelerated filer and large accelerated filer” in Rule 12b-2 of the Exchange Act.

¨ Large Accelerated filer

¨ Accelerated filer

x Non-accelerated filer

Indicate by check mark which basis of accounting the registrant has used to prepare the financial statements included in this filing:

x US GAAP

¨ International Financial Reporting Standards as issued by the International Accounting Standards Board

¨ Other

If “Other” has been checked in response to the previous question, indicate by check mark which financial statement item the registrant has elected to follow.

¨ Item 17 ¨ Item 18

If this is an annual report, indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

¨ Yes x No

(APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PAST FIVE YEARS)

Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of the securities under a plan confirmed by a court.

¨ Yes ¨ No

TABLE OF CONTENTS

			Page

PART I

	ITEM 3.	KEY INFORMATION	5
	A.	Selected financial data	5
	B.	Capitalization and Indebtedness	7
	C.	Reasons for the Offer and Use of Proceeds	8
	D.	Risk factors	8

	ITEM 4.	INFORMATION ON THE COMPANY	20
	A.	History and Development of the Company.	20
	B.	Business Overview	24
	C.	Organizational Structure	28
	D.	Property, plant and equipment	28

	ITEM 5.	OPERATING AND FINANCIAL REVIEW AND PROSPECTS	30
	A.	Results of operation	33

	ITEM 8.	FINANCIAL INFORMATION	35
	A.	Consolidated Statements and Other Financial Information	35
	B.	Significant Changes	36

	ITEM 9.	THE OFFER AND LISTING	36
	A.	Offer and Listing Details	36
	B.	Plan of Distribution	37
	C.	Markets	37
	D.	Selling Shareholders	37
	E.	Dilution	37
	F.	Expenses of the Issue	37

PART II

	ITEM 15.	CONTROLS AND PROCEDURES	37

PART III

	ITEM 17.	FINANCIAL STATEMENTS	39

	ITEM 19.	EXHIBITS	39

EXPLANATORY NOTE

China Cablecom Holdings, Ltd., a corporation formed in the British Virgin Islands (hereinafter referred to as “we,” “us,” “our,” “China Cablecom Holdings” or the “Company”) is filing this Amendment No. 1 on Form 20-F/A (this "Amendment") to its Annual Report on Form 20-F for the fiscal year ended December 31, 2010, which was filed with the Securities and Exchange Commission on July 28, 2011 (the "Original Filing"). This amendment is filed solely with respect to the following items:

Part I, Item 3- Key Information

Part I, Item 4- Information on the Company

Part I, Item 5- Operating and Financial Review and Prospects

Part I, Item 8- Financial Information

Part I, Item 9- The Offer and Listing

Part II, Item 15- Controls and Procedures

Part III, Item 17- Financial Statements.

Part III, Item 19- Exhibits.

This Amendment is being filed for the purpose of restating our financial statements for the year ended December 31, 2010 and related disclosure to reflect the deconsolidation of Hubei Chutien Video Communication Network Co., Ltd. (“Hubei Chutien”) and Binzhou Broadcasting and Television Information Network Co., Ltd. (“Binzhou Broadcasting”), following the transition guidance found in ASC 810-10-65-2 regarding deconsolidation.

The Company reassessed its evaluation of the effectiveness of its disclosure controls and procedures as of December 31, 2010. As a result of that assessment, management has concluded that the Company’s disclosure controls and procedures as of December 31, 2010 were not effective.

Except as described above, no other changes have been made to Amendment, and this Amendment does not amend, update or change any other information in the financial statements or any other items or disclosures in the Original Filing. This Amendment does not reflect events occurring after the filing of the Original Filing or modify or update those disclosures, including any exhibits to the Original Filing affected by subsequent events.

CERTAIN INFORMATION

As used in this Annual Report on Form 20-F (the “Annual Report”), unless otherwise indicated, “we,” “us,” “our,” the “Company,” the “Corporation,” and “China Cablecom Holdings” refers to China Cablecom Holdings, Ltd., a company formed in the British Virgin Islands and its subsidiaries. All references to “China Cablecom,” and “China Cablecom Ltd.” refer to China Cablecom Ltd., a wholly owned British Virgin Islands subsidiary of China Cablecom Holdings, and the entity, along with China Cablecom Company Limited, a wholly-owned Hong Kong subsidiary of China Cablecom (“HKZ”), through which our operating businesses are held. All references to “China” or the “PRC” refer to the People’s Republic of China.

See Item 3: “Key Information” for historical information regarding the average rate between buying and selling as published by the People’s Bank of China with respect to Chinese Renminbi. You should not construe these translations as representations that the Chinese Renminbi amounts actually represent such US dollar amounts or could have been or could be converted into US dollars at the rates indicated or at any other rates. Such rates are the number Chinese Renminbi per one United States dollar quoted by the People’s Bank of China.

FORWARD-LOOKING STATEMENTS

This Annual Report contains ‘‘forward-looking statements’’ that represent our beliefs, projections and predictions about future events. All statements other than statements of historical fact are ‘‘forward-looking statements,’’ including any projections of earnings, revenue or other financial items, any statements of the plans, strategies and objectives of management for future operations, any statements concerning proposed new projects or other developments, any statements regarding future economic conditions or performance, any statements of management’s beliefs, goals, strategies, intentions and objectives, and any statements of assumptions underlying any of the foregoing. Words such as ‘‘may’’, ‘‘will’’, ‘‘should’’, ‘‘could’’, ‘‘would’’, ‘‘predicts’’, ‘‘potential’’, ‘‘continue’’, ‘‘expects’’, ‘‘anticipates’’, ‘‘future’’, ‘‘intends’’, ‘‘plans’’, ‘‘believes’’, ‘‘estimates’’ and similar expressions, as well as statements in the future tense, identify forward-looking statements.

These statements are necessarily subjective and involve known and unknown risks, uncertainties and other important factors that could cause our actual results, performance or achievements, or industry results, to differ materially from any future results, performance or achievements described in or implied by such statements. Actual results may differ materially from expected results described in our forward-looking statements, including with respect to correct measurement and identification of factors affecting our business or the extent of their likely impact, the accuracy and completeness of the publicly available information with respect to the factors upon which our business strategy is based or the success of our business.

Forward-looking statements should not be read as a guarantee of future performance or results, and will not necessarily be accurate indications of whether, or the times by which, our performance or results may be achieved. Forward-looking statements are based on information available at the time those statements are made and management’s belief as of that time with respect to future events, and are subject to risks and uncertainties that could cause actual performance or results to differ materially from those expressed in or suggested by the forward-looking statements. Important factors that could cause such differences include, but are not limited to, those factors discussed under the headings ‘‘Risk Factors’’, ‘‘Operating and Financial Review and Prospects,’’ ‘‘Information on Our Company” and elsewhere in this Annual Report.

PART I

ITEM 3.

KEY INFORMATION

A.	Selected financial data

The following summary consolidated financial data for the years ended December 31, 2008, 2009 and 2010 have been derived from the Company’s restated audited consolidated financial statements included in this Annual Report beginning on page F-1. The following selected historical statement of income data for the period from October 1, 2006 (Inception) to December 31, 2006 and the year ended December 31, 2007 and the selected historical balance sheet data as of December 31, 2006 and 2007 have been derived from the audited financial of the Company not included in this annual report.

Certain factors that affect the comparability of the information set forth in the following table are described in the “Operating and Financial Review and Prospects,” and the Financial Statements and related notes thereto included elsewhere in this Annual Report.

	October 1 (Inception) Through Year Ended December 31, 2006			Year Ended December 31, 2007			Year Ended December 31, 2008			Year Ended December 31, 2009			Year Ended December 31, 2010
(in US$ thousands, except for share data)
Statement of Income Data:
Management fee income		-			-			-			1,005			4,450
Shares of profit (loss) on operating joint ventures		-			-			89			(1,223	)		(8,248	)

Operating loss		(73	)		(572	)		(5,182	)		(5,185	)		(9,248	)
Interest expenses		-			(1,296	)		(8,654	)		(9,855	)		(4,212	)
Loss before income tax		(73	)		(1,812	)		(13,410	)		(54,638	)		(13,432	)
Net loss attributable to China Cablecom Holdings, Ltd.		(73	)		(1,812	)		(13,411	)		(54,869	)		(14,408	)
Net loss per share
Basic		(219.33	)		(2.63	)		(5.42	)		(16.18	)		(1.97	)
Diluted		(219.33	)		(2.63	)		(5.42	)		(16.18	)		(1.97	)
Weighted average number ordinary shares, Basic and diluted
Basic		333			688,893			2,472,504			3,391,924			7,327,475
Diluted		333			688,893			2,472,504			3,391,924			7,327,475

Weighted ordinary share numbers have been restated to reflect the Company’s March 2, 2010 1-for-3 Reverse Split.

	As of December 31, 2006			As of December 31, 2007		As of December 31, 2008		As of December 31, 2009		As of December 31, 2010
(in US$ thousands)
Balance Sheet Data:
Cash and cash equivalents		-			12,508		9,427		6,993		929
Prepaid expenses and advances		-			591		6,856		6,075		3,646
Total current assets		-			13,337		16,283		13,068		4,575
Property, plant & equipment, net		4			74		202		159		138
Investment in operating joint ventures		-			27,047		40,045		66,103		64,027
Total assets		56			42,855		57,773		81,317		70,384
Current portion of long term debt, net of discount		-			9,618		9,482		-		-
Amount due to an associate company		-			-		-		10,734		7,050
Total current liabilities		128			33,755		10,272		11,242		9,120
Convertible notes, net of discounts		-			-		16,684		-		-
Senior secured notes, net of discounts		-			-		-		7,973		10,634
Junior secured notes, net of discounts		-			-		-		17,063		16,159
Unsecured notes, net of discounts		-			-		-		5,135		4,218
Notes payable, net of discount and current portion		-			7,478		-		-		-
Total liabilities		128			41,232		26,956		41,412		40,131
Total shareholders equity		(72	)		1,623		30,817		39,905		30,253

Exchange Rate Information

Our business is currently conducted in and from China in Renminbi. In this annual report, all references to “Renminbi” and “RMB” are to the legal currency of China and all references to U.S. dollars, dollars, $ and US$ are to the legal currency of the United States. The conversion of Renminbi into U.S. dollars in this annual report is based on the middle rate between buying and selling as published by the People’s Bank of China of the PRC. For reader convenience, this annual report contains translations of some Renminbi or U.S. dollar amounts for 2010 at US$1.00: RMB6.6227, which was the middle rate on December 31, 2010. The published middle rate on June 27, 2011 was US$1.00: RMB6.4426. We make no representation that any Renminbi or U.S. dollar amounts could have been, or could be, converted into U.S. dollars or Renminbi, as the case may be, at any particular rate, the rates stated below, or at all. The Chinese government imposes control over its foreign currency reserves in part through direct regulation of the conversion of Renminbi into foreign currency and through restrictions on foreign trade.

The following table sets forth the average middle rates for Renminbi expressed as per one U.S. dollar for the years 2006, 2007, 2008, 2009 and 2010:

Year	Renminbi Average(1)
2006		7.9579
2007		7.6040
2008		6.9451
2009		6.8314
2010		6.6227

(1)	Determined by averaging the middle rate between buying and selling rates on the last business day of each month during the relevant period.

The following table sets forth the high and low middle rates for Renminbi expressed as per one U.S. dollar during the past six months.

Month Ended	High		Low
April 30, 2011		6.5527		6.4990
May 31, 2011		6.5108		6.4845
June 30, 2011		6.4892		6.4683
July 31, 2011		6.4350		6.4683
August 30, 2011		6.4392		6.3776
September 30, 2011		6.3980		6.3816

B.	Capitalization and Indebtedness

Not required.

C.	Reasons for the Offer and Use of Proceeds

Not required.

D.	Risk factors

Risks Relating to Our Business

We have a very limited operating history, which may make it difficult for you to evaluate our business and prospects.

We entered into a joint venture with Binzhou Broadcasting in September 2007 and Hubei Chutian in June 2008. As a result, our operating history is very limited and, accordingly, the revenue and income potential of our business and markets are unproven. Binzhou Broadcasting’s and Hubei Chutian’s historical operating results may not provide a meaningful basis for evaluating our business, financial performance and prospects, particularly in view of the fact that the networks comprising the operations of Binzhou Broadcasting and Hubei Chutian were historically operated independently prior to the formation of our operating joint ventures and are no longer consolidated into our financial statements.

We also face numerous risks, uncertainties, expenses and difficulties frequently encountered by companies at an early stage of development. Some of these risks and uncertainties relate to our ability to:

develop new customers or new business from existing customers;

expand the technical sophistication of the products we offer;

respond effectively to competitive pressures;

attract and retain qualified management and employees; and

adverse effect on our business caused by the global financial crisis.

We may not meet internal or external expectations regarding our future performance. If we are not successful in addressing these risks and uncertainties, our business, operating results and financial condition may be materially adversely affected.

We must make significant intercompany loans to Binzhou Broadcasting to preserve our investment in Binzhou Broadcasting.

Pursuant to the terms of the Asset Transfer Agreement with the local state-owned enterprise, Binzhou Guangdian Network Co., Ltd. (“Binzhou SOE”), Binzhou Broadcasting must complete the payment for all assets to be transferred not later than August 2008, which was later extended to December 31, 2008, January 31, 2009, December 31, 2009 and ultimately to June 30, 2010. To the extent the financing for such payment is not completed, our ability to preserve our investment in Binzhou Broadcasting will be jeopardized. Based on a government decree in an initiative in 2010 of “forming one consolidated broadcasting network within one province”, the Shandong party committee and government announced plans on the development and reform of provincial Radio and TV broadcasting network, in such that, the municipal, county (county level city or district) Radio and TV broadcasting network shall freeze headcounts and assets and maintain the current organization to suspend any pending financing activities. In this regard, a government document issued by Shandong SARFT regarding the “freezing of investment and head count” was provided to us by Binzhou SARFT / Binzhou SOE. They explained to us that they cannot sign any amendment or agreement with us during the “freezing” period and all agreements would be frozen until later notice. As a result, our Binzhou JV has temporarily suspended any current obligations until further notification from the government. While we have received several extensions from Binzhou SOE and anticipate amending the Framework Agreement once the “freezing” is lifted, our control and economic interest over Binzhou Broadcasting did not change before and after June 30, 2010, nor was there any change in Binzhou Broadcasting’s board composition, senior management, or its Article of Association.

We will be required to seek additional financing and to amend or modify the terms of our existing debts to meet the obligations upon the lifting of the freezing described above. Although we have orally agreed previous extensions with the SOE, there can be no assurance that future negotiations will result in the amendment of the asset transfer agreements involved. In addition, there can be no assurance that any additional financing will be available on acceptable terms or at all. Absent amendment of the framework agreement governing the establishment of Binzhou Broadcasting, any such failure to secure additional financing by us will create a default under the terms of the joint venture agreement between Jinan Youxiantong Network Technology Co., Ltd. (“JYNT”) and Binzhou SOE and may result in us no longer being entitled to rights as a joint venture partner regarding the operations of Binzhou Broadcasting.

The PRC television broadcasting industry may not digitalize as quickly as we expect, as a result of which our revenues would be materially adversely affected.

Our future success depends upon the pace at which PRC television network operators switch from analog to digital transmission. Various factors may cause PRC television network operators to convert from analog to digital transmission at a slow pace. The PRC government, which has strongly encouraged television network operators to digitalize their networks and has set a target of 2015 for all, except for up to six, analog channels to be switched off, may relax or cancel the 2015 target. Also, PRC television viewers may fail to subscribe to digital television services in sufficient numbers to support wide-scale digitalization.

Existing and emerging alternative platforms for delivering television programs, including terrestrial networks, Internet protocol television and satellite broadcasting networks present a significant competitive risk to our business.

We compete with traditional terrestrial television networks for the same pool of viewers. As technologies develop, other means of delivering information and entertainment to television viewers are evolving. For example, some telecommunications companies in the PRC are seeking to compete with terrestrial broadcasters and cable television network operators by offering Internet protocol television, or IPTV, which allows telecommunications companies to stream television programs through telephone lines. While the PRC Ministry of Information Industry, or the MII, so far has issued only five IPTV licenses, it may issue significantly more licenses in the future. In addition, the State Administration of Radio, Film and Television (“SARFT”) issued a broadcast license last year to the PRC’s first direct satellite broadcast company, which is expected to begin commercial operation this year. To the extent that the terrestrial television networks, telecommunications companies and direct satellite television network operators compete successfully with us for viewers, our ability to attract and retain subscribers may be adversely affected.

Changes in the regulatory environment of, and government policies towards, the PRC television network industry could materially adversely affect our revenues.

Strong PRC government support has been a significant driver of the PRC television broadcasting industry’s transition from analog to digital transmission. Although the PRC government has set a target of 2015 for all television networks to switch to digital transmissions, terminating all analog transmissions except for up to six channels that will continue in service for the benefit of those unable to afford digital television, there is no assurance that the government will not change or adjust its digitalization policies at any time, including canceling or relaxing the target date for digitalization. If the digitalization process in the PRC were to be slowed down or otherwise adversely affected by any government action or inaction, we may not be able to develop new customers or attract new business from existing customers, and our revenues would be materially adversely affected.

Furthermore, the television broadcasting industry in the PRC is a highly regulated industry. Government regulations with respect to television broadcasting content, the amount and content of advertising, the pricing of pay-television subscriptions, the role of private-sector investment and the role of foreign investment significantly influence the business strategies and operating results of our customers. Among other things, the SARFT must approve the creation of new premium content channels and has the power to order television network operators to stop airing programs or advertising that it considers illegal or inappropriate. Any of such adverse government actions against television network operators could in turn cause us to lose existing or potential subscribers.

In China, the basic subscription fee for cable television is regulated, municipal cable television operators have to apply for approval at the local Price Bureau, which will then arrange public hearings to approve any subscription price changes. Although Binzhou Broadcasting and Hubei Chutian have applied for and have acquired approval for a subscription fee raise from the Price Bureau in year 2009 and 2005, respectively, there is no guarantee that any future partnership networks will succeed in getting approval for subscription fee raises for digital television services.

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

Because most of our officers and directors reside outside of the U.S., it may be difficult, if not impossible, to acquire jurisdiction over these persons in the event a lawsuit is initiated against such officers and directors by shareholders in the U.S. It also is unclear if extradition treaties now in effect between the U.S. and the PRC would permit effective enforcement of criminal penalties of the federal securities laws. Furthermore, because substantially all of our assets are located in the PRC, it would also be extremely difficult to access those assets to satisfy an award entered against us in U.S. court. Moreover, we have been advised that the PRC does not have treaties with the U.S. providing for the reciprocal recognition and enforcement of judgments of courts. As a result, it may not be possible for investors in the U.S. to enforce their legal rights, to effect service of process upon our directors or officers or to enforce judgments of U.S. courts predicated upon civil liabilities and criminal penalties of our directors and officers under federal securities laws.

The Chinese government could change its policies toward, or even nationalize, private enterprise, which could reduce or eliminate our interests.

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

Foreign exchange regulations in the PRC may affect our ability to pay dividends in foreign currency or conduct other foreign exchange business.

Renminbi, or RMB, is not presently a freely convertible currency, and the restrictions on currency exchanges may limit our ability to use revenues generated in RMB or to make dividends or other payments in U.S. dollars. The PRC government, through the State Administration for Foreign Exchange (“SAFE”), regulates conversion of RMB into foreign currencies. Currently, Foreign Invested Enterprises (such as China Cablecom) are required to apply for “Foreign Exchange Registration Certificates” and to renew those certificates annually. However, even with that certification, conversion of currency in the “capital account” (e.g. for capital items such as direct investments or loans) still requires the approval of SAFE. There is no assurance that SAFE approval will be obtained, and if it is not, it could impede our business activities.

Failure to comply with PRC regulations relating to registration requirements for employee stock ownership plans or share option plans may subject PRC plan participants or us to fines or other legal or administrative sanctions.

On December 25, 2006, the People’s Bank of China issued the Administration Measures on Individual Foreign Exchange Control. These measures set forth the requirements for foreign exchange transactions by individuals (both PRC or non-PRC citizens) under either the current account or capital account. The related implementation rules were issued by SAFE on January 5, 2007. The implementation rules specify approval requirements for certain capital account transactions, including a PRC citizen’s participation in the employee stock ownership plan or stock option plan of an overseas publicly-listed company. On March 28, 2007, SAFE promulgated the Foreign Exchange Administration Application Procedure for Domestic Individuals Participating in an Employee Stock Holding Plan or Stock Option Plan of an Overseas Listed Company, or the “Stock Option Rule”. Under these regulations, PRC citizens who are granted stock options or restricted share units, or issued restricted shares by an overseas publicly listed company, are required, through a PRC agent or PRC subsidiary of such overseas publicly listed company, to register with SAFE and complete certain other procedures. As we have granted certain stock options to our PRC employees, we and our PRC employees who have been granted stock options are subject to these regulations. We are now in the process of applying for such registration with the local SAFE. Compliance with these regulations has not had a material adverse effect on our financial condition or results of operations. However, if we or our PRC optionees fail to comply with these regulations, we or our PRC optionees may face sanctions imposed by SAFE or any other PRC government authorities, including restriction on foreign currency conversions and additional capital contributions to our PRC subsidiaries.

The Onshore and Offshore Loan Agreements may be scrutinized by the SAFE

In June and July of 2008, China Cablecom entered into 2 loan agreements, whereby, China Cablecom extended 2 loans in U.S. dollars to Rich Dynamic Limited, a Hong Kong company, (“RDL”), which amount in aggregate, to $38,000,000. These loans were utilized as payment to a shareholder (“Shareholder”) of Chengdu Chuanghong Jinsha Real Estate Co., Ltd. (“Chengdu Chuanghong”), for the purpose of acquiring 60% of the equity interest in this company. After payment was made to the Shareholder, 2 RMB loans were extended by the Shareholder to JYNT, pursuant to the loan agreements entered into between the Shareholder and JYNT, which amount in aggregate to RMB 244,000,000.

Although neither of the loan transactions contravenes PRC Law, we cannot ensure that the SAFE will not regard the transactional arrangement (taken as a whole) as an attempt to circumvent the SAFE’s scrutiny over foreign exchange. If the SAFE deems the transactional arrangement to be illegal, it may levy fines and restrict our ability to transfer funds to our PRC subsidiaries. As a result, the development of our business may be adversely affected.

We may have difficulty establishing adequate management, legal and financial controls in the PRC, which could result in misconduct and difficulty in complying with applicable laws and requirements.

As a quasi-governmental business in the PRC, our networks have not historically focused on establishing Western-style management and financial reporting concepts and practices, as well as modern banking, computer and other internal control systems. We may have difficulty in hiring and retaining a sufficient number of qualified internal control employees to work in the PRC. As a result of these factors, we may experience difficulty in establishing management, legal and financial controls, collecting financial data and preparing financial statements, books of account and corporate records and instituting business practices that meet Western standards, especially on the operation level of our joint ventures with municipal cable TV network operators.

Being a foreign private issuer exempts us from certain Securities and Exchange Commission requirements that provide shareholders the protection of information that must be made available to shareholders of United States public companies.

As a foreign private issuer. we are exempt from certain provisions applicable to United States public companies including:

The rules requiring the filing with the SEC of quarterly reports on Form 10-Q or current reports on Form 8-K;

The sections of the Securities Exchange Act regulating the solicitation of proxies, consents or authorizations with respect to a security registered under the Securities Exchange Act;

Provisions of Regulation FD aimed at preventing issuers from making selective disclosures of material information; and

The sections of the Securities Exchange Act requiring insiders to file public reports of their share ownership and trading activities and establishing insider liability for profits realized from any “short swing” trading transactions (i.e., a purchase and sale, or a sale and purchase, of the issuer’s equity securities within less than six months).

Because of these exemptions, our shareholders may not be afforded the same protections or information generally available to investors holding shares in public companies organized in the United States.

Techniques employed by manipulative short sellers in Chinese small cap stocks may drive down the market price of our ordinary shares

Short selling is the practice of selling securities that the seller does not own but rather has, supposedly, borrowed from a third party with the intention of buying identical securities back at a later date to return to the lender. The short seller hopes to profit from a decline in the value of the securities between the sale of the borrowed securities and the purchase of the replacement shares, as the short seller expects to pay less in that purchase than it received in the sale. As it is therefore in the short seller’s best interests for the price of the stock to decline, many short sellers (sometime known as “disclosed shorts”) publish, or arrange for the publication of, negative opinions regarding the relevant issuer and its business prospects in order to create negative market momentum and generate profits for themselves after selling a stock short. While traditionally these disclosed shorts were limited in their ability to access mainstream business media or to otherwise create negative market rumors, the rise of the Internet and technological advancements regarding document creation, videotaping and publication by weblog (“blogging”) have allowed many disclosed shorts to publicly attack a company’s credibility, strategy and veracity by means of so-called research reports that mimic the type of investment analysis performed by large Wall Street firm and independent research analysts. These short attacks have, in the past, led to selling of shares in the market, on occasion in large scale and broad base. Issuers with business operations based in China and who have limited trading volumes and are susceptible to higher volatility levels than U.S. domestic large-cap stocks, can be particularly vulnerable to such short attacks.

These short seller publications are not regulated by any governmental, self-regulatory organization or other official authority in the U.S., are not subject to the certification requirements imposed by the Securities and Exchange Commission in Regulation AC (Regulation Analyst Certification) and, accordingly, the opinions they express may be based on distortions of actual facts or, in some cases, fabrications of facts. In light of the limited risks involved in publishing such information, and the enormous profit that can be made from running just one successful short attack, unless the short sellers become subject to significant penalties, it is more likely than not that disclosed shorts will continue to issue such reports.

While we intend to strongly defend our public filings against any such short seller attacks, often times we are constrained, either by principles of freedom of speech, applicable state law (often called “Anti-SLAPP statutes”), or issues of commercial confidentiality, in the manner in which we can proceed against the relevant short seller. You should be aware that in light of the relative freedom to operate that such persons enjoy – oftentimes blogging from outside the U.S. with little or no assets or identity requirements – should we be targeted for such an attack, our stock will likely suffer from a temporary, or possibly long term, decline in market price should the rumors created not be dismissed by market participants.

A recent SEC investor bulletin regarding reverse mergers may drive down the market price of our Ordinary Shares.

On June 9, 2011, the SEC issued an investor bulletin in which it explained the process by which company becomes a public company by means of a reverse merger, described the potential risks of investing in a reverse merger company and detailed recent enforcement actions taken by it against certain reverse merger companies. In particular the investor bulletin raised specific concerns with respect to foreign companies that access the U.S. markets through the reverse merger process, as we did. The SEC investor bulletin could lead investors in our ordinary shares to sell their shares and may cause other investors not to invest in us, thus driving down the market price of our ordinary shares or making it more difficult for us to raise funds in the future.

Risks Relating to our Corporate Structure

We rely on contractual arrangements with Jinan Youxiantong Network Technology Co., Ltd. (“JYNT”) and its shareholders to exercise control over the management and operations of JYNT. These contractual arrangements may not be as effective as direct ownership in providing us with control over JYNT. JYNT and its shareholders may fail to take certain actions required for our business or follow our instructions to comply with the relevant PRC regulations despite their contractual obligations to do so. On the other hand, if we had direct ownership of JYNT, we would be able to directly exercise our rights as a shareholder to effect changes in the board of directors of JYNT, which in turn could effect changes at the management level, subject to any applicable fiduciary obligations on the board of directors.

As a result of the contractual agreements entered into between our indirect subsidiary Heze Cablecom Network Technology Co., Ltd., a PRC company (“HZNT”), and the shareholders of JYNT, we control are considered the primary beneficiary of JYNT, and are entitled to consolidate the financial results of JYNT, which includes JYNT’s equity investment in the joint venture which operates Binzhou Broadcasting and Hubei Chutian. JYNT and its shareholders are generally speaking not permitted to terminate the contractual agreements prior to the expiration date. The shareholders of JYNT, however, may not act in the best interest of our company or perform their contractual obligations.

While the terms of these contractual agreements are designed to minimize the operational impact of governmental regulation of the media, cultural and telecommunications industries in the PRC, and provide us with voting control and the economic interests associated with the shareholders’ equity interest in JYNT, they are not accorded the same status at law as direct ownership of JYNT and may not be as effective in providing and maintaining control over JYNT as direct ownership. For example, JYNT and its shareholders may fail to take certain actions required for our business or follow our instructions to comply with the relevant PRC regulations despite their contractual obligations to do so. On the other hand, if we had direct ownership of JYNT, we would be able to directly exercise our rights as a shareholder to effect changes in the board of directors of JYNT, which in turn could effect changes at the management level, subject to any applicable fiduciary obligations.

We may not be able to take control of JYNT upon the occurrence of certain events, such as the imposition of statutory liens, judgments, court orders, death or capacity. If the PRC government proposes new laws or amends current laws that are detrimental to the contractual agreements with JYNT, such changes may effectively eliminate our control over the JYNT and our ability to consolidate the financial results of the joint venture which operates Binzhou Broadcasing and Hubei Chutian, JYNT’s sole operational assets. In addition, if the shareholders of JYNT fail to perform as required under those contractual agreements, we will have to rely on the PRC legal system to enforce those agreements, and there is no guarantee that we will be successful in an enforcement action.

Furthermore, if we, or HZNT, are found to be in violation of any existing PRC laws or regulations, the relevant regulatory authorities would have broad discretion to punish us for such violation, including, but not limited to the following:

levying fines;

confiscating income; and/or

requiring a restructure of ownership or operations.

Any failure by JYNT’s shareholders to perform their obligations under our contractual arrangements with them may have a material adverse effect on our business.

JYNT and its shareholders may fail to take certain actions required for our business or in that case, our business operations will be significantly disrupted, and our business and financial condition and operations will be materially and adversely affected.

If JYNT and/or its shareholders fail to perform their obligations under their respective agreements with us, we may have to rely on legal remedies under PRC law, including seeking specific performance or injunctive relief, exercising the pledge by JNYT’s shareholders of their equity in JNYT, which may not be effective.

All of these contractual arrangements are governed by PRC law and provide for the resolution of disputes through arbitration in the PRC. Accordingly, these contracts would be interpreted in accordance with PRC law and any disputes would be resolved in accordance with PRC legal procedures. The legal environment in the PRC is not as developed as in certain other jurisdictions, such as the United States. As a result, uncertainties in the PRC legal system could limit our ability to enforce these contractual arrangements, which may make it difficult to exert effective control over JYNT or its subsidiaries, and our ability to conduct our business may be adversely affected.

We have not yet registered the equity pledges made by JYNT’s shareholders of their equity in JYNT, which means that these pledges have not been officially validated. Accordingly, the contractual arrangements among the two nominee shareholders, JYNT, and our subsidiaries, HZNT and HKZ, designed to control JYNT’s operations and extract its profits, may be undermined.

PRC Property Law provides that all equity pledges under equity pledge agreements must be registered to be validated. Our subsidiary, HZNT, has entered into equity pledge agreements with the two nominee shareholders, Pu Yue and Liang Yuejing, whereby Pu Yue and Liang Yuejing are obligated to promptly take necessary steps to register and perfect the equity pledges to secure the service fees under the Exclusive Service Agreements and the loans under the Loan Agreements between HZNT and them. HZNT is now coordinating with Pu Yue and Liang Yuejing to prepare various equity pledge registration application documents (including the Chinese versions of the equity pledge agreements and other application forms) in accordance with the requirements of the local competent branch of the State Administration for Industry and Commerce. However, until the equity pledges are registered and perfected, we may not enforce these pledges in PRC courts, and accordingly the contractual arrangements among the two nominee shareholders, JYNT, and our subsidiaries, HZNT and HKZ, designed to control JYNT’s operations and extract its profits, will be undermined. Moreover, it is possible that, in the absence of a validated pledge, the two nominee shareholders may pledge or otherwise dispose of their equity interests in JYNT to third parties.

As a result of recent changes in relevant accounting rules, we no longer consolidate the financial operations of Binzhou Broadcasting and Hubei Chutian.

JYNT has entered into a joint venture agreement and a series of services agreements that, pursuant to previously applicable accounting principles, entitled JYNT to consolidate 60% of the operating results of Binzhou Broadcasting, although JYNT only had a 49% equity interest and the Binzhou SOE had retained control of the joint venture. JYNT has also entered into a joint venture agreement and a series of services agreements that, pursuant to previously applicable accounting principles, entitled JYNT to consolidate 55% of the operating results of Hubei Chutian, although JYNT only had a 49% equity interest and the local state-owned enterprise, Hubei Chutian Radio and Television Information Network Co., Ltd. (“Hubei SOE”) had retained control of the joint venture. Because JYNT lacks actual control over Binzhou Broadcasting and Hubei Chutian, JYNT, and us through our contractual arrangements with the shareholders of JYNT, are protected in our dealings with the Binzhou SOE and the Hubei SOE only to the extent provided for in the joint venture agreement and the services agreements.

In order to consolidate the two joint ventures Binzhou Broadcasting and Hubei Chutian under previously applicable accounting literature, we concluded that we had the power to direct the activities of each joint venture and that we had the obligation to absorb losses and right to receive benefits that could be significant to the relevant joint venture. We made this determination based on the facts that we have the obligation to absorb 49% of the losses and has right to receive 49% of any residual benefits of each joint venture. Furthermore, JYNT receives 11% of the net profits of Binzhou Broadcasting and 6% of the net profits of Hubei Chutian through exclusive service agreements. In addition, JYNT has a veto right regarding the appointment of the general manager of Binzhou Broadcasting and Hubei Chutian, the right to appoint their chief financial officer, and an obligation to provide continued financial resources for investment and capital expenditures for the future expansion of their operations. The result of these rights and obligations given to JYNT is that China Cablecom and JYNT have the ability to substantially influence the joint venture’s daily operations and financial affairs, appoint their senior executives and approve all matters requiring shareholder vote. After performing an evaluation subsequent to the adoption of ASU 2009-17 (ASU 2009-17), which had the effect of modifying the accounting principles involved in this analysis subsequent to our initial acquisition of both joint ventures, we no longer believe the consolidation of Binzhou Broadcasting and Hubei Chutian is appropriate. Accodingly, we are now required to account for the joint ventures under the “equity method” of accounting, which has the effect of substantially decreasing the net assets (and liabilities) on our balance sheet and net income we reflect from the operations of each joint venture.

The agreements that establish the structure for operating our business may result in the relevant PRC government regulators revoking or refusing to renew Binzhou Broadcasting’s or Hubei Chutian’s operating permit.

Each of Binzhou Broadcasting and Hubei Chutian obtains exclusive operating rights by entering into exclusive service agreements with Binzhou SOEs and Hubei SOEs, respectively, who are 100% owned by different levels of branches of SARFT in Binzhou Municipality and Hubei Municipality, respectively. Binzhou SOEs and Hubei SOEs enjoy the right to provide cable access services in their respective territories. Any foreign-invested enterprise incorporated in the PRC, such as our subsidiary, HZNT, is prohibited from conducting a business involving the transmission of broadcast television or the provision of cable access services. Our contractual arrangements with JYNT and its shareholders provide us with the economic benefits of Binzhou Broadcasting and Hubei Chutian. However, under recently adopted revisions to US GAAP, we may not consolidate the financial results of Binzhou Broadcasting and Hubei Chutian into our financial statements. If SARFT determines that our control over JYNT, or our relationship with Binzhou Broadcasting or Hubei Chutian through those contractual arrangements, is contrary to their generally restrictive approach towards foreign participation in the PRC cable television industry, there can be no assurance that SARFT will not reconsider Binzhou Broadcasting’s or Hubei Chutian’s eligibility to hold exclusive rights to provide operating services or cable access services to Binzhou SOEs or Hubei SOEs. If that were to happen, we might have to discontinue all or a substantial portion of our business pending the approval of exclusive service and operating rights on the required operating permits held by Binzhou SOEs and Hubei SOEs. In addition, if we are found to be in violation of any existing or futures PRC laws or regulations, the relevant regulatory authorities, including the SARFT, would have broad discretion in dealing with such violation, including levying fines, confiscating our income, revoking the business licenses or operating licenses of our PRC affiliates and Binzhou SOE and Hubei SOE, requiring us to restructure the relevant ownership structure or operations, and requiring us to discontinue all or any portion of our operations. Any of these actions could cause significant disruption to our business operations and may materially and adversely affect our business, financial condition and results of operations.

Risks Relating to the People’s Republic of China

Adverse changes in economic policies of the PRC government could have a material adverse effect on the overall economic growth of the PRC, which could reduce the demand for our services and materially adversely affect our business.

All of our assets are located in and all of our revenue is sourced from the PRC. Accordingly, our business, financial condition, results of operations and prospects will be influenced to a significant degree by political, economic and social conditions in the PRC generally and by continued economic growth in the PRC as a whole.

The PRC economy differs from the economies of most developed countries in many respects, including the amount of government involvement, level of development, growth rate, control of foreign exchange and allocation of resources. Although the PRC government has implemented measures since the late 1970s emphasizing the utilization of market forces for economic reform, the reduction of state ownership of productive assets and the establishment of improved corporate governance in business enterprises, a substantial portion of productive assets in the PRC is still owned by the PRC government. In addition, the PRC government continues to play a significant role in regulating industry development by imposing industrial policies. The PRC government also exercises significant control over the PRC’s economic growth through the allocation of resources, controlling payment of foreign currency-denominated obligations, setting monetary policy and providing preferential treatment to particular industries or companies.

While the PRC economy has experienced significant growth over the past decade, growth has been uneven, both geographically and among various sectors of the economy. The PRC government has implemented various measures to encourage economic growth and guide the allocation of resources. Some of these measures benefit the overall PRC economy, but may also have a negative effect on us. For example, our operating results and financial condition may be adversely affected by government control over capital investments or changes in tax regulations that are applicable to us.

Uncertainties in the interpretation and enforcement of PRC laws and regulations could limit the legal protections available to you and us.

The PRC legal system is a civil law system based on written statutes. Unlike common law systems, it is a system in which legal decisions have limited value as precedents. In 1979, the PRC government began to promulgate a comprehensive system of laws and regulations governing economic matters in general. The overall effect of legislation over the past three decades has significantly increased the protections afforded to various forms of foreign or private-sector investment in the PRC. These laws and regulations change frequently, and their interpretation and enforcement involve uncertainties. For example, we may have to resort to administrative and court proceedings to enforce the legal protections that we enjoy either by law or contract. However, since PRC administrative and court authorities have significant discretion in interpreting and implementing statutory and contractual terms, it may be more difficult to evaluate the outcome of administrative and court proceedings and the level of legal protection we enjoy than in more developed legal systems. These uncertainties may also impede our ability to enforce the contracts we have entered into. As a result, these uncertainties could materially adversely affect our business and operations.

Under the EIT Law, we, China Cablecom and HKZ may each be classified as a “resident enterprise” of the PRC. Such classification could result in PRC tax consequences to us, China Cablecom and HKZ and our non-PRC shareholders.

On March 16, 2007, the Fifth Session of the Tenth National People’s Congress passed the Enterprise Income Tax Law of the People’s Republic of China (the “EIT Law”), 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, although the dividends paid to one resident enterprise from another may qualify as “tax-exempt income.” 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 on the Issues Regarding Recognition of Overseas Incorporated Domestically Controlled Enterprises as PRC Resident Enterprises Based on the De Facto Management Body Criteria, which was retroactively effective as of January 1, 2008. Under this notice, an overseas incorporated domestically controlled enterprise will be recognized as a PRC resident enterprise if it satisfies all of the following conditions: (i) the senior management responsible for daily production/business operations is primarily located in the PRC, and the location(s) where such senior management execute their responsibilities are primarily in the PRC; (ii) strategic financial and personnel decisions are made or approved by organizations or personnel located in the PRC; (iii) major properties, accounting ledgers, company seals and minutes of board meetings and shareholder meetings, etc., are maintained in the PRC; and (iv) 50% or more of the board members with voting rights or senior management habitually reside in the PRC. However, it is still unclear whether PRC tax authorities would require us, China Cablecom and/or HKZ to be treated as a PRC resident enterprise.

If the PRC tax authorities determine that we, China Cablecom and HKZ are each a “resident enterprise” for PRC enterprise income tax purposes, a number of PRC tax consequences could follow. First, we, China Cablecom and HKZ may be subject to enterprise income tax at a rate of 25% on our or their worldwide taxable income, as the case may be, as well as PRC enterprise income tax reporting obligations. Second, although under the EIT Law and its implementing rules, dividends paid to us from our PRC subsidiaries through China Cablecom and HKZ, our Hong Kong sub-holding company, assuming we, China Cablecom and HKZ are each treated as a “resident enterprise” under the EIT Law, may qualify as “tax-exempt income,” we cannot guarantee that such dividends will not be subject to withholding tax generally at a rate of 10% (or, if the Double Tax Avoidance Agreement between Hong Kong and Mainland China is applicable, 5%). Finally, the new “resident enterprise” classification could result in a situation in which a PRC tax is imposed on dividends we pay to our non-PRC shareholders and gains derived by our non-PRC shareholders from transferring our ordinary shares, if such income is considered PRC-sourced income by the relevant PRC tax authorities.

If any such PRC income tax applies to a non-PRC shareholder, such shareholder may be entitled to a reduced rate of PRC taxes under an applicable income tax treaty and/or a dedution for such PRC tax against such shareholder’s domestic taxable income or a foreign tax credit in respect of such PRC tax against such share holder’s domestic income tax liability (subject to applicable conditions and limitations). You should consult with your own tax advisors regarding the applicability of any such taxes, the effects of any applicable income tax treaties, and any available deductions or foreign tax credits.

Risks Relating to Being Incorporated in the British Virgin Islands

We are a British Virgin Islands company and, because the rights of shareholders under British Virgin Islands law differ from those under U.S. law, you may have fewer protections as a shareholder.

Our corporate affairs are governed by our Amended and Restated Memorandum and Articles of Association, the BVI Business Companies Act, 2004 (as amended) of the British Virgin Islands (the “Act”) and the common law of the British Virgin Islands. The rights of shareholders to take action against the directors, actions by minority shareholders and the fiduciary responsibility of the directors under British Virgin Islands law are governed by the Act and the common law of the British Virgin Islands. The common law of the British Virgin Islands is derived in part from comparatively limited judicial precedent in the British Virgin Islands as well as from English common law, which has persuasive, but not binding, authority on a court in the British Virgin Islands. The rights of shareholders and the fiduciary responsibilities of directors under British Virgin Islands law are not as clearly established as they would be under statutes or judicial precedent in some jurisdictions in the United States. In particular, the British Virgin Islands has a less developed body of securities laws as compared to the United States, and some states (such as Delaware) have more fully developed and judicially interpreted bodies of corporate law.

British Virgin Islands companies may not be able to initiate shareholder derivative actions, thereby depriving shareholders of the ability to protect their interests.

British Virgin Islands companies may not have standing to initiate a shareholder derivative action in a federal court of the United States. The circumstances in which any such action may be brought, and the procedures and defenses that may be available in respect to any such action, may result in the rights of shareholders of a British Virgin Islands company being more limited than those of shareholders of a company organized in the United States. Accordingly, shareholders may have fewer alternatives available to them if they believe that corporate wrongdoing has occurred. The British Virgin Islands courts are also unlikely to recognize or enforce against us judgments of courts in the United States based on certain liability provisions of U.S. securities law, and to impose liabilities against us, in original actions brought in the British Virgin Islands, based on certain liability provisions of U.S. securities laws that are penal in nature.

The laws of the British Virgin Islands provide statutory protection for minority shareholders.

Under the laws of the British Virgin Islands, there is some statutory law for the protection of minority shareholders under the Act. The principal protection under statutory law is that shareholders may bring an action to enforce our Amended and Restated Memorandum and Articles of Association. The Act sets forth the procedure to bring such a claim. Shareholders are entitled to have the affairs of the company conducted in accordance with the general law and the Amended and Restated Memorandum and Amended and Restated Articles of Association. Companies are not obligated to appoint an independent auditor and shareholders are not entitled to receive the audited financial statements of the company.

There are common law rights for the protection of shareholders that may be invoked (such rights have also now been given statutory footing under the Act), largely dependent on English company law, since the common law of the British Virgin Islands for business companies is limited. Under the general rule pursuant to English company law known as the rule in Foss v. Harbottle, a court will generally refuse to interfere with the management of a company at the insistence of a minority of its shareholders who express dissatisfaction with the conduct of the company’s affairs by the majority or the board of directors. However, every shareholder is entitled to have the affairs of the company conducted properly according to law and the constituent documents of the corporation. As such, if those who control the company have persistently disregarded the requirements of company law or the provisions of the company’s memorandum or articles of association, then the courts will grant relief. Generally, the areas in which the courts will intervene are the following: (i) an act complained of which is outside the scope of the authorized business or is illegal or not capable of ratification by the majority, (ii) acts that constitute fraud on the minority where the wrongdoers control the company, (iii) acts that infringe on the personal rights of the shareholders, such as the right to vote, and (iv) where the company has not complied with provisions requiring approval of a special or extraordinary majority of shareholders, which are more limited than the rights afforded minority shareholders under the laws of many states in the U.S.

The Act has introduced a series of remedies available to members. Where a company incorporated under the Act conducts some activity which breaches the Act or the company’s memorandum and articles of association, the court can issue a restraining or compliance order. Members can now also bring derivative, personal and representative actions under certain circumstances. The traditional English basis for members’ remedies have also been incorporated into the Act – where a member of a company considers that the affairs of the company have been, are being or are likely to be conducted in a manner likely to be oppressive, unfairly discriminating or unfairly prejudicial to him, he may now apply to the BVI court for an order on such conduct.

Any member of a company may apply to the British Virgin Islands court for the appointment of a liquidator for the company and the court may appoint a liquidator for the company if it is of the opinion that it is just and equitable to do so.

The Act provides that any member of a company is entitled to payment of the fair value of his shares upon dissenting from any of the following: (a) a merger; (b) a consolidation; (c) any sale, transfer, lease, exchange or other disposition of more than 50 per cent in value of the assets or business of the company if not made in the usual or regular course of the business carried on by the company but not including (i) a disposition pursuant to an order of the court having jurisdiction in the matter, (ii) a disposition for money on terms requiring all or substantially all net proceeds to be distributed to the members in accordance with their respective interest within one year after the date of disposition, or (iii) a transfer pursuant to the power of the directors to transfer assets for the protection thereof; (d) a redemption of 10 percent, or fewer of the issued shares of the company required by the holders of 90 percent, or more of the shares of the company pursuant to the terms of the Act; and (e) an arrangement, if permitted by the court.

Generally any other claims against a company by its shareholders must be based on the general laws of contract or tort applicable in the British Virgin Islands or their individual rights as shareholders as established by the company’s memorandum and articles of association.

Because we do not intend to pay dividends shareholders will benefit from an investment in our ordinary shares only if they appreciate in value.

We have never declared or paid any cash dividends on our ordinary shares. We currently intend to retain all future earnings, if any, for use in the operations and expansion of the business. As a result, we do not anticipate paying cash dividends in the foreseeable future. Any future determination as to the declaration and payment of cash dividends will be at the discretion of our Board of Directors and will depend on factors our Board of Directors deems relevant, including among others, our results of operations, financial condition and cash requirements, business prospects, and the terms of China Cablecom Holdings’ credit facilities, if any, and any other financing arrangements. Accordingly, realization of a gain on shareholders’ investments will depend on the appreciation of the price of the ordinary shares. There is no guarantee that our ordinary shares will appreciate in value.

There is a risk that we could be treated as a U.S. domestic corporation for U.S. federal income tax purposes, which could result in significantly greater U.S. federal income tax liability to us.

Section 7874(b) of the Internal Revenue Code of 1986, as amended (the “Code”) generally provides that a corporation organized outside the United States which acquires, directly or indirectly, pursuant to a plan or series of related transactions substantially all of the assets of a corporation organized in the United States will be treated as a domestic corporation for U.S. federal income tax purposes if shareholders of the acquired corporation, by reason of owning shares of the acquired corporation, own at least 80% (of either the voting power or the value) of the stock of the acquiring corporation after the acquisition. If Section 7874(b) were to apply to the Redomestication Merger and Business Combination (as each such term is defined in the section of this Annual Report entitled “Information on the Company”), then, among other things, we would be subject to U.S. federal income tax on our worldwide taxable income following the Redomestication Merger and Business Combination as if we were a domestic corporation. Although it is not expected that Section 7874(b) will apply to treat us as a domestic corporation for U.S. federal income tax purposes, this result is not entirely free from doubt. As a result, shareholders are urged to consult their tax advisors on this issue. The balance of this discussion (including the discussion in the section of this Annual Report entitled “Taxation – United States Federal Income Taxation”) assumes that we will be treated as a foreign corporation for U.S. federal income tax purposes.

We may qualify as a passive foreign investment company, or “PFIC,” which could result in adverse U.S. federal income tax consequences to U.S. investors.

In general, we will be classified as a PFIC for any taxable year in which either (1) at least 75% of our gross income (looking through certain corporate subsidiaries) is passive income or (2) at least 50% of the average value of our assets (looking through certain corporate subsidiaries) is attributable to assets that produce, or are held for the production of, passive income. Passive income generally includes, without limitation, dividends, interest, rents, royalties, and gains from the disposition of passive assets. If we are determined to be a PFIC for any taxable year during which a U.S. Holder (as defined in the section of this Annual Report captioned ‘‘Taxation – United States Federal Income Taxation – General’’) held our ordinary shares, the U.S. Holder may be subject to increased U.S. federal income tax liability and may be subject to additional reporting requirements. Based on the composition (and estimated values) of the assets and the nature of the income of us and our subsidiaries in 2010, we do not anticipate that we will be treated as a PFIC in 2010. Notwithstanding the foregoing, our view that we will not be treated as a PFIC in 2010 is not free from doubt because of, among other things, our significant cash position and uncertainties relating to the actual values of the other assets of us and our subsidiaries in 2010. Our actual PFIC status for any subsequent taxable year will not be determinable until after the end of such taxable year. Accordingly, there can be no assurance with respect to our status as a PFIC for 2010 or any subsequent taxable year. We urge U.S. Holders to consult their own tax advisors regarding the possible application of the PFIC rules. For a more detailed explanation of the tax consequences of PFIC classification to U.S. Holders, see the section of this Annual Report captioned ‘‘Taxation—United States Federal Income Taxation—U.S. Holders—Passive Foreign Investment Company Rules.’’

ITEM 4.

INFORMATION ON THE COMPANY

A.	History and Development of the Company.

China Cablecom Holdings was formed on October 25, 2007, in the British Virgin Islands, and operates through a wholly-owned subsidiary China Cablecom Ltd., a British Virgin Islands company, which (through subsidiaries) is a joint-venture provider of cable television services in the PRC, operating in partnership with a local state-owned enterprise (“SOE”) authorized by the PRC government to control the distribution of cable TV services. China Cablecom acquired the network it currently operates in Binzhou, Shandong Province in September 2007 and in Hubei Province in June 2008 by entering into a series of asset purchase and services agreements with a company organized by SOEs owned directly or indirectly by local branches of SARFT in five different municipalities to serve as a holding company of the relevant businesses.

China Cablecom Ltd.’s operating activity from October 6, 2006 (inception date) to September 30, 2007, was limited and related to its formation, and professional fees and expenses associated with its acquisition activities.

On September 20, 2007, China Cablecom Ltd. entered into a Purchase Agreement with several accredited investors (the “Purchase Agreement”), and consummated the private placement of 20,000,000 units, each unit consisting of (i) a promissory note in the face amount of $499,808, bearing interest at the rate of 10% per annum (the “Note”), and (ii) 19,167 detachable shares of China Cablecom Ltd.’s Class A Preferred Stock (the “Units”). As security for the Notes, Mr. Clive Ng pledged and granted to the investors, on a pro rata basis, a first priority lien on 50.1% of the ordinary shares of China Cablecom Ltd. owned by him. The proceeds of the sale and issuance of the Units were used in the following manner: (i) $12.0 million was used to finance the acquisition through contractual arrangements of Binzhou Broadcasting and (ii) $8 million was used for working capital, including payment of certain administrative, legal, investment banking and accounting fees, repayment of loans in the aggregate amount of $720,000 owed to Mr. Ng and a $475,000 loan made to Jaguar Acquisition Corporation (“Jaguar”). Jaguar used the proceeds of this loan for working capital expenses associated with completing its acquisition of China Cablecom Ltd. After its merger with and into China Cablecom Holdings, Jaguar ceased to exist and the loan was assumed by China Cablecom Holdings and continues to be in effect an intercompany obligation.

On April 9, 2008, pursuant to the terms of an Agreement and Plan of Merger, dated October 30, 2007 (“Merger Agreement”), Jaguar merged with and into (the “Redomestication Merger”) China Cablecom Holdings, its wholly-owned British Virgin Islands subsidiary, for the purpose of redomesticating Jaguar to the British Virgin Islands as part of the acquisition of China Cablecom Ltd., and China Cable Merger Co., Ltd., a wholly-owned British Virgin Islands subsidiary of China Cablecom Holdings (“China Cable Merger Co.”), merged with and into China Cablecom Ltd., resulting in China Cablecom Ltd. becoming a wholly-owned subsidiary of China Cablecom Holdings (the “Business Combination”).

At the closing of the Business Combination, China Cablecom Holdings issued to China Cablecom’s shareholders aggregate merger consideration of 2,066,680 of ordinary shares and China Cablecom Holdings assumed approximately $20 million in outstanding debt of China Cablecom.

In connection with the approval of the merger at the April 9, 2008 Special Meeting of Stockholders of Jaguar, the stockholders of Jaguar also approved (i) the adoption of China Cablecom Holdings’ 2007 Omnibus Securities and Incentive Plan, which provides for the grant of up to 10,000,000 ordinary shares of China Cablecom Holdings or cash equivalents to directors, officers, employees and/or consultants of China Cablecom Holdings and its subsidiaries; (ii) the grant of up to 8,120,000 ordinary shares (‘‘Performance Shares’’), pursuant to consulting and other arrangements to certain of Jaguar’s and China Cablecom’s insiders in connection with the Business Combination upon the achievement of certain financial goals of China Cablecom Holdings following the Business Combination; and (iii) the payment of cash bonuses of up to $5,000,000 to certain officers and directors of Jaguar and China Cablecom following the exercise of existing warrants after the Business Combination.

As a result of the Redomestication Merger and Business Combination, China Cablecom Holdings succeeded to the registration of Jaguar’s common stock under Section 12(g) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), which was suspended upon its listing on the NASDAQ Capital Market and re-instated through the filing of a registration statement on Form 8-A on July 28, 2011.

The Company consummated a convertible debt financing in May 2008 with current and new investors involving the issuance of an aggregate of $43.175 million principal amount at maturity of secured convertible notes and approximately 1.525 million ordinary shares to assist in securing its acquisition of Hubei Broadcasting. Interest was prepaid at closing, resulting in net proceeds (excluding existing investors who reinvested principal and interest repayments in the new issuance) to the Company of approximately $19 million. Chardan Capital Markets, LLC, Lazard Frères & Co. LLC and Roth Capital Partners , LLC acted as co-placement agents.

The 3-year senior secured convertible notes bear an interest rate of 9.99% per annum and are secured by a pledge of the stock of the Company’s wholly-owned subsidiary, China Cablecom Ltd., and all other assets owned by the Company outside of the People’s Republic of China. The notes are convertible into shares of the Company’s ordinary shares at a conversion price of $9.50 per share and are guaranteed by China Cablecom Ltd. as to the principal, interest and all other amounts due thereunder. In addition, the Company issued approximately 1.525 million ordinary shares to the investors and is obligated to issue an additional approximate 125,000 shares if the notes are not repaid upon the first anniversary of the closing and an additional approximate 300,000 shares if the notes are not repaid upon the second anniversary of the closing. Additionally, the Company has the ability to prepay the notes for a total of $34 million upon the first anniversary of their issuance and any time thereafter at prepayment amounts equal to such amount plus additional amounts equal to approximately 10 5/8% of the principal amount of maturity per annum of such notes, based on the number of days from such first anniversary to such date of pre payment. To the extent that the Company calls its outstanding warrants and such warrants are exercised, it is required to repay the notes with the net proceeds from such warrant exercise.

Debt Restructure and Private Financings, October 2009

Debt Restructure

Due to a default in repayment of principal and interest on certain of its outstanding promissory notes in April 2009, the Company negotiated a comprehensive restructuring of its outstanding capital markets debt obligations which closed in October 2009.

Pursuant to the Restructuring, the Company entered into a waiver agreement and consent with all note holders pursuant to which the note holders agreed to exchange approximately $47 million in aggregate principal amount of current debt obligations for an aggregate of $5.5 million in unsecured notes, $18 million in secured notes and 65,799,286 newly issued shares of Series A Convertible Preferred Shares, each share convertible into one ordinary share and representing in aggregate approximately 66.2% of the Company’s ordinary shares outstanding after the closing of the Restructuring and the private financing referred to below.

Until fourteen months after the issue date, principal on the new notes is subject to cancellation in the event that (i) the Company’s ordinary shares close at a daily volume weighted average price greater than $0.85 for 30 consecutive days with daily dollar volume of 500,000 or more and all of the conversion shares issuable upon conversion of the Series A Preferred Shares could have been sold by the noteholder during such 30 day period; or (ii) noteholders convert the Series A Convertible Preferred Shares into ordinary shares within 14 months after the issue date, such cancellation in proportion to the amount converted. Since the Restructuring, an aggregate of $1,840,965 in principal amount of the secured notes and $365,205 in principal amount of the unsecured notes has been cancelled as a result of such conversions.

The unsecured and secured notes are due April 2016 and bear non-cash interest at 5% per annum payable semi-annually in the form of the Company’s Ordinary Shares valued at 95% of the volume-weighted average price for the 10 trading days prior to the required payment date. Amortizing principal repayments with respect to both the unsecured and secured notes commence in 2012.

Private Financing

In October 2009, the Company also completed a private placement of $33 million in aggregate principal amount of 12% Senior Secured Notes (the “New Notes”) due October 2015. The holders of New Notes have been issued 23,158,080 Series B Convertible Preferred Shares, representing approximately 23.3% of the Company’s total outstanding ordinary shares after the Restructuring and issuance of the New Notes. Immediately following the issuance, the Company redeemed approximately $13.9 million of the New Notes, resulting in approximately $19.1 million of New Notes remaining outstanding.

The New Notes are due October 2015 and bear cash interest at 12% per annum payable semi-annually commencing October 2012. Amortizing principal repayments with respect to the New Notes were commence in 2014 as a result of the redemption described above.

The net proceeds from the private financing were used to satisfy the Company’s remaining obligations to the Hubei SOE under its supplementary framework agreement.

Joint Venture with Binzhou Guangdian Network Co., Ltd. and China Cablecom.

In September 2007, China Cablecom entered into a Framework Agreement through its affiliated company, JYNT, to purchase a 49% equity interest and 60% economic benefit in a newly created joint venture, Binzhou Broadcasting and Television Information Network Co., Ltd. (“Binzhou Broadcasting”). The local state-owned enterprise, Binzhou Guangdian Network Co., Ltd. (“Binzhou SOE”), agreed to contribute certain assets and businesses for a 51% equity interest in Binzhou Broadcasting. Binzhou SOE was organized in 2006 to aggregate various local state-owned cable assets and businesses within the city of Binzhou, China. Prior to the formation of Binzhou Broadcasting, Binzhou SOE consolidated the following five cable operating companies and networks:

Binzhou Guang Shi Network Co., Ltd.;

Huiming Cable Network Co., Ltd.;

Boxing Dian Guang Media Co., Ltd.;

Zouping Cable Network Center; and

Binzhou Guang Dian Cable Network Center.

In order to comply with current PRC laws limiting foreign ownership in the cable industry, Binzhou Broadcasting operates in a joint venture and China Cablecom manages its interest in the joint venture through direct ownership of wholly foreign owned entities and affiliated companies wholly owned by PRC citizens. China Cablecom entered into contractual arrangements, through its affiliated PRC company, JYNT, to provide marketing, strategic consulting and technical support and services to Binzhou Broadcasting for a fee of 11% of the net profits of the joint venture. In addition, in the Framework Agreement between JYNT and the Binzhou SOE, JYNT has the ability to control certain aspects of the financing and management of Binzhou Broadcasting arising from a veto right it holds regarding the appointment of the general manager of Binzhou Broadcasting, the right to appoint the chief financial officer of Binzhou Broadcasting and an obligation to provide continued financial resources for investment and capital expenditure for the future expansion of the joint venture’s operations. As a result, China Cablecom has the ability to substantially influence the joint venture’s daily operations and financial affairs, appoint their senior executives and approve all matters requiring shareholder vote. In addition, China Cablecom enjoys 60% of the economic benefits of the joint venture through its 11% fee of net profit combined with its 49% ownership interest. However, under recently adopted revisions to US GAAP, we may not consolidate the financial results of Binzhou Broadcasting into our financial statements. The other provisions of the Framework Agreement (including an appraisal of the assets of Binzhou Broadcasting, the initial capitalization of Binzhou Broadcasting and a prohibition on the Binzhou SOE establishing a competing network in the cooperation area) have either been performed in full or are contained in the formal agreement entered into subsequent thereto.

Joint Venture with Hubei Chutian Radio and Television Information Network Co., Ltd. and China Cablecom.

In June 2008, China Cablecom entered into a Framework Agreement through its affiliated company, JYNT, to purchase a 49% equity interest and 60% economic benefit in a newly created joint venture, Hubei Chutian Video Communication Network Co., Ltd. (“Hubei Chutian”). In September 2009, the Framework Agreement was revised by Supplement Agreement II. China Cablecom reduced its economic interest to 55% in Hubei Chutian. The local state-owned enterprise, Hubei Chutian Radio and Television Information Network Co., Ltd. (“Hubei SOE”), agreed to contribute certain assets and businesses for a 51% equity interest in Hubei Chutian. Hubei SOE was organized under the laws of the PRC to aggregate various local state-owned cable assets and businesses within the Province of Hubei, China.

In order to comply with current PRC laws limiting foreign ownership in the cable industry, Hubei Chutian operates in a joint venture and China Cablecom manages its interest in the joint venture through direct ownership of wholly foreign owned entities and affiliated companies wholly owned by PRC citizens. China Cablecom entered into contractual arrangements, through its affiliated PRC company, JYNT, to provide marketing, strategic consulting and technical support and services to Hubei Chutian for a fee of 6% of the net profits of the joint venture. In addition, in the Framework Agreement between JYNT and the Hubei SOE, JYNT has the ability to control certain aspects of the financing and management of Hubei Chutian arising from a veto right it holds regarding the appointment of the general manager of Hubei Chutian, the right to appoint the chief financial officer of Hubei Chutian and an obligation to provide continued financial resources for investment and capital expenditure for the future expansion of the joint venture’s operations. As a result, China Cablecom has the ability to substantially influence the joint venture’s daily operations and financial affairs, appoint their senior executives and approve all matters requiring shareholder vote. In addition, China Cablecom enjoys 55% of the economic benefits of the joint venture through its 6% fee of net profit combined with its 49% ownership interest. However, under recently adopted revisions to US GAAP, we may not consolidate the financial results of Hubei Chutian into our financial statements.

On October 24, 2011, we announced that we had received offers to purchase the joint venture interest we hold in Hubei Chutian through JYNT, including an offer from our joint venture partner Hubei SOE, The offer by the Hubei SOE was mandated by SARFT and made in compliance with provincial regulatory policies. Current negotiations on terms including purchase price and conditions are still pending and subject to further review by our Board of Directors. Upon conclusion of a sale, funds from the transaction will be used to reduce outstanding indebtedness of China Cablecom and excess proceeds distributed back to shareholders.

Our registered office is located at Kingston Chambers, P. O. Box 173, Road Town, Tortola, British Virgin Islands. Our principal executive office is located at Room 458, North Building, Wenjiao Plaza No. 1 Qingnian Dong Road, Jinan, People’s Republic of China 250001. The telephone number of our principal executive office is (86) 531 8712-9000.

B.	Business Overview

Overview

We are a joint-venture provider of cable television services in the PRC, operating in partnership with a local state-owned enterprise authorized by the PRC government to control the distribution of cable TV services (“SOE”). We invested in the networks we currently operate by our equity joint ventures in Binzhou, Shandong Province in September 2007 and in Hubei Province in June 2008 by entering into a series of asset purchase and services agreements with companies organized by SOEs owned directly or indirectly by local branches of SARFT to serve as holding companies of the relevant businesses. Due to restrictions on foreign ownership of PRC media and broadcasting entities, our 49% joint venture interest is held through a series of contractual arrangements intended to result in the risks and benefits of Binzhou Broadcasting’s and Hubei Chutian’s operations being primarily borne by us, rather than through a direct ownership of equity securities. These contractual arrangements with Binzhou SOE have an initial term of 20 years. The parties may mutually seek to extend these agreements upon the expiry of the current term. The contractual agreements with Hubei SOE have a fixed term of 30 years and China Cablecom agreed to transfer the remaining economic interest in the Joint Venture to Hubei SOE after the 30 years period for free.

We are not aware of any legal impediments that may affect the renewal of the agreements with Binzhou SOE and to sign the new agreements with Hubei Chutian after the 30 years period under current PRC laws. In order for us to continue to derive the economic benefits from the operation of Binzhou Broadcasting and Hubei Chutian, it must renew these agreements with Binzhou SOE and sign new agreements with Hubei SOE after the first 30 year co-operation period. Binzhou Broadcasting operates a cable network with 477,439 paying subscribers as of December 31, 2010 and Hubei Chutian operates a cable network with approximately 1,270,253 paying subscribers as of December 31, 2010 . China Cablecom’s strategy is to replicate the acquisition by operating partnership model in other municipalities in the PRC and then introduce operating efficiencies and increase service offerings in the networks it has acquired.

The PRC Cable Industry

China is the world’s largest cable television market in subscriber volume. As of December 31, 2010, China had 175 million cable subscribers, including 86 million digital TV subscribers. We expect to benefit from the following additional trends affecting the PRC and the Chinese cable TV industry:

Rising household incomes in the PRC. According to a report by the McKinsey Global Institute, over the next 20 years more people will migrate to China’s cities for higher-paying jobs. These working consumers will create a new and significant middle class. McKinsey also notes that the trend in China is toward a younger middle class.

Government mandates ensure proliferation of digital cable. According to the provisions of SARFT, China will carry out digital broadcast and television roundly in 2010, and will halt analog TV programs in 2015. With the approaching deadline, the pace of conversion to DTV speeds up in China.

New and dynamic product offerings. The transition to digital cable benefits cable operators by expanding their market for premium product and service offerings to their customers. Examples that are more fully describe below, include broadband Internet access; premium content subscription; electronic programming guide, or EPG; video on-demand, VOD; personal video recorder, or PVR; and others.

Higher ARPU. Digital cable offers cable network operators an opportunity to create new revenue streams. In addition, SARFT has authorized cable operators to apply for rate increases to cover the costs associated with digitalization. Recently, the government approved rate increase in excess of 70%. On average, subscribers in the PRC pay $1.50 per month for basic cable service compared to digital cable which averages $3.50 per month.

Products and Service Offerings

Currently, we operate two cable networks, Binzhou Broadcasting and Hubei Chutian, and offer the following products and services to our customers: (i) basic analog and digital cable subscription services (including installation), referred to as video subscription services, (ii) landing service for satellite TV broadcasters, (iii) network leasing, (iv) broadband Internet, and (v) other services, including premium content and interactive.

Video subscription services. The majority of the revenues are currently generated from video subscription services and related installation fees. As of December 31, 2010, the two networks we operate served 1,747,692 paying subscribers. Subscribers typically pay Binzhou Broadcasting and Hubei Chutian on an annual basis and generally may discontinue services at any time. Monthly subscription rates were ranging from $1.86 to $2.33 for analog service and $3.72 to $4.35 for digital service.

Landing service for satellite TV broadcasters. Satellite broadcasters in China have no network and must pay a ‘‘landing fee’’ to local cable operators.

Network leasing. Local enterprises in the PRC, such as hospitals, schools, financial institutions and telecommunications companies, do not have complete coverage within the region for their own local network. Accordingly, they rent network bandwidth from local cable companies to operate their internal communication networks among their subsidiaries and branches.

Broadband Internet. Binzhou Broadcasting and Hubei Chutian offer to residential, commercial and government broadband internet services. Key customers for cable internet access include new buildings and the government. As of December 31, 2010, the networks we operate had 26,095 broadband households, representing 1.5% of service penetration.

We operate cable network systems through Binzhou Broadcasting and Hubei Chutian as summarized in the table below:

	Binzhou Broadcasting	Hubei Chutian
Location	Shandong province, China	Hubei province, China
Number of networks	5	23
Subscribers (2010/2009)	477,439/482,016	1,270,253/1,191,679
Revenues (2010/2009)	$11.5 million/$10.5 million	$42.4 million/$35 million

Most of our revenues are from subscription fees and one time installation charges.

Competition and Threats of Substitution

Cable operators in the PRC are local monopolies, similar to the U.S. in the past where only one cable network operated in one municipal city or one county. China Cablecom believes it is possible that current cable network operators may ultimately lose their single monopoly status. Additionally, there are other private sector investors seeking to explore the cable industry in the Shandong and Hubei provinces, including CITIC Group, a publicly traded company listed in Hong Kong.

There are, however, emerging threats to traditional cable, such as Internet Protocol TV, or IPTV, and Direct Broadcast Satellite, or DBS. Since media and media content are strongly controlled by the PRC government, new entrants to the market will face significant hurdles that are heavily government policy oriented and not market-oriented. Foreign IPTV models cannot be copied in the PRC due to the strict control by the government for censorship purposes. As a consequence, cable operators will continue to be the dominant market force for the foreseeable future. For example, industry experts forecast that in five years cable network operators will still maintain 70% market share in the financially lucrative pay TV content distribution market.

IPTV rollout in the PRC has also been hampered by high service fees, which are $8.00 per month, as well as conflict of interest issues between local SARFT and local telecommunications operators, which has slowed the licensing process for IPTV operators. China Cablecom believes that these new entrants will not pose significant threats of substitution to cable network operators in the foreseeable future.

Similar to the U.S., DBS poses even less of a threat to cable operators than IPTV. There are very few DBS households in the PRC. Due to PRC policies, DBS typically cannot be directly received into households, requiring retransmission through terrestrial or cable networks. The transition to digital cable greatly diminishes the competitive threat to cable from DBS.

Other threats of substitution, such as mobile TV, are in the early stages of development and customer acceptance of this technology is unknown. We believe mobile TV does not represent a competitive threat.

Currently, there are several large cable operators in the PRC. The cable market is highly fragmented and the large operators are geographically centered. For example, Beijing GeHau, a cable operator with 4.5 million households, focuses its efforts in Beijing. Hangzhou Wasu, a cable operator with 1.0 million households, focuses its efforts in Hangzhou. The largest consolidator in the PRC is CITIC Guoan, or CITIC, with 22 million households. CITIC is a publicly listed company on the Shenzhen stock exchange and is diversified across several industries, including cable TV, real estate, energy and others. CITIC has focused its efforts in the Hunan and Jiangxi provinces; however, they do operate one local cable network, Weihai, in Shandong and Wuhan, the capital city of Hubei Province.

China Cablecom believes that there are many attractive acquisition targets in PRC and the presence of other cable operators in the PRC does not pose a competitive threat, especially in the territories that we have already covered, given the inherent monopolistic nature of the cable business in the PRC.

On January 13, 2010 the State Council of People’s Republic of China announced a decision to accelerate the convergence of three networks: telecom, broadcasting and internet. As a result, cable operators will face competition from the PRC telecom companies for broadcasting revenue, although the Company management believes this also provides opportunities for cable operates to tap the broadband access and VoIP markets. China Cablecom believes the 3-Net convergence plan will not have immediate impact on its business since the plan sets a 3-year trial run in limited sites for convergence service to firm up relevant regulatory policies and framework. Given the fact that content is still under the control of SARFT, management believes telecom operators are unlikely to attract a lot of IPTV subscribers with the same content now provided by cable operators.

Marketing and Sales

Our sales and marketing strategy depends heavily on the monopolistic situation of cable in the PRC. We do not intend to spend significant dollar amounts on marketing and sales efforts other than for converting the analog signal to a digital signal. The cost of marketing programs associated with premium content service offerings will be mostly borne by the content providers and integrators.

Governmental Regulation

The media, cultural and telecommunications industries in China are highly regulated by the PRC government, even though the past several years have seen liberalization in this regard. Many foreign and domestic industry participants operate by means of establishing flexible corporate and commercial relationships that allow them to avoid regulatory restrictions while at the same time achieving their business goals. As a result, in order to comply with current PRC laws limiting foreign ownership in the cable industry, Binzhou Broadcasting and Hubei Chutian operate in a joint venture and we manage our interest in the joint venture through direct ownership of wholly foreign owned entities and affiliated companies wholly owned by PRC citizens. This organization structure is designed to minimize the operational impact of governmental regulation in the PRC, although the contractual arrangements required in this regard are not accorded the same status at law as direct ownership, which may affect our ability to secure future financing and pursue its strategic growth plans. The effectiveness of the current contractual arrangement is more dependent on there being no change (or at least no substantial change) in the current PRC regulations, rather than direct ownership. There is the possibility that the relevant PRC authorities could, at any time, decide that this contractual arrangement violates existing or future PRC laws, regulations or policies.

Cable TV

Overall responsibility for the administration of the cable TV sector is divided between the Chinese Communist Party (“CCP”) and the central government. The CCP Central Committee is responsible for censorship; the State Council, in co-operation with the National People’s Congress (“NPC”), is the government body responsible for promulgating new laws and regulations for the cable TV industry. Responsibility for enforcing policies and laws set out by the CCP and State Council at the local level lies with the relevant department of the State Administration of Radio, Film and Television (“SARFT”).

Investments in cable TV companies are subject to the supervision of the SARFT and other relevant government agencies. The primary restrictions in this regard are as follows:

Transmission Network

Foreign Investment – Prohibited – Foreign investors are prohibited from investing in all levels of radio and TV transmission networks.

Domestic Private Investment – Limited Access – Private investors may invest in the construction and operation of cable TV transmission networks and participate in the reconstruction of digitalization of the receiving terminals of cable TV, subject to a 49% shareholding ceiling. However, private investors are allowed to hold majority shares in companies which only operate the community access portion (terminal connection) of the cable TV transmission networks.

TV Stations and Channels

Foreign Investment/Domestic Private Investment – Prohibited – Foreign and domestic private investors are prohibited from investing in radio stations and TV stations and channels.

Notwithstanding the recent attempts at liberalization, the cable TV industry is still primarily State owned. At the central government level, the SARFT is responsible for approving the establishment of cable, radio and TV stations, the nationwide administration of cable, radio and TV services, and developing and promulgating policies, standards and regulations. At the local level, the radio and TV administrative departments and bureau of provinces, municipalities and counties are in charge of the administration of radio and TV services and of implementing policies, standards and regulations within their jurisdiction. In accordance with the Interim Measures on Administration of Fees for Basic Receipt and Maintenance of Cable TV (jointly promulgated by the SARFT and the National Development and Reform Commission on December 2, 2004 and effective as of January 1, 2005), the standards governing the fees for basic receipt and maintenance of cable TV shall be set by the authorities in charge of pricing. A prior hearing is required before the authorities set or adjust the fees. Any changes to the fee standards must comply with the principles of equality, fairness, transparency, and efficiency. In addition, the service costs incurred by providers, as well as the feasibility of the consumer market are considered in making any changes.

As a result of the above restrictions on foreign investment, we rely on the contractual arrangements with these affiliated PRC companies to hold and maintain the licenses necessary to operate our cable TV business in China.

The chart below reflects the division of authority.

Assets of different SARFT

				District & county
		Province SARFT	City SARFT (e.g.	SARFT (e.g.
	Central SARFT	(e.g. Shandong)	Binzhou, Jining)	Boxing/Binzhou)

Character	No direct access to households but strong power due to central authorities	No direct access to households	Direct access to households in its network	Direct access to households in its network

Networks	Backbone connected with province backbone	Backbone in the province, from city to city	Backbone in the city	Small networks

Channels – Broadcasters	CCTV	Province channels, satellite channels	Local channels, network center	Local channels, network center

As a result of the control arrangements established by us through affiliated PRC companies wholly owned by PRC citizens, we believe that we are in compliance with the above prohibitions. As set forth in the chart above, however, there are different authorities within the PRC that could seek to regulate the operations of Binzhou Broadcasting, and the fact that one such authority does not impose restrictions on Binzhou Broadcasting’s operations does not mean that any other authority is foreclosed from doing so.

The Measures for the Administration of Radio and Television Program Transmission Services (promulgated on July 6, 2004 by the SARFT as Decree No. 33 and effective as of August 10, 2004), require entities that wish to provide TV program transmission and cable access services to obtain an operating permit for Radio and Television Program Transmission Services.

Only the following entities may apply for an Operating Permit: (i) radio and television broadcasting entities which have been established with the permission of the SARFT; (ii) radio, film and television groups and their affiliates which have been established with the permission of the SARFT; and (iii) state-owned entities that have the right to operate radio and television cable networks.

The Operating Permit contains information about the transmission content, transmission range, transmission technology and transmission methods. The entity holding the Operating Permit must operate in accordance with the details set forth on the permit.

Legal Proceedings

We are not a party to any material legal proceedings nor are we aware of any circumstance that may reasonably lead a third party to initiate legal proceedings against us.

C.	Organizational Structure

PRC Corporate Structure

China Cablecom conducts substantially all of its business in the PRC through HZNT, and Jinan Youxiantong Network Technology Co., Ltd. (“JYNT”), a PRC company and a domestic variable interest entity (“VIE”). JYNT is controlled by the Company through contractual arrangements. China Cablecom also owns 100% of the equity interest of China Cablecom Company Limited, a Hong Kong holding company that, in turn, directly owns 100% of the equity interest of HZNT.

In order to comply with the PRC’s regulations on private investment in the cable industry, China Cablecom operates its cable business in a joint venture with a local state-owned enterprise. China Cablecom’s operations are conducted through direct ownership of China Cablecom Company Limited and HZNT and contractual arrangements with JYNT. China Cablecom does not have an equity interest in JYNT, but instead has arranged for two nominees, Pu Yue, our CEO, and his wife, Liang Yuejing, to hold 95% and 5% equity interest in JYNT respectively on behalf of our subsidiaries, which structure is subject to a series of contractual arrangements. China Cablecom Company Limited and HZNT, through these contractual arrangements with Pu Yue, Liang Yuejing and JYNT, contractually control and enjoy the economic benefits derived from JYNT. Please see “PRC Corporate Structure”.

China Cablecom operates its cable business in two joint ventures: Binzhou Broadcasting, which is 49% owned by JYNT and 51% by Binzhou SOE, a PRC state-owned enterprise and Hubei Chutian, which is 49% owned by JYNT and 51% by Hubei SOE, a PRC state-owned enterprise.

Note:

① Pu Yue and Liang Yuejing own respectively 95% and 5% equity in JYNT.

② HKZ and HZNT can contractually control JYNT through the contractual arrangement. Please see “Organizational Structure”.

We do not directly or indirectly have an equity interest in JYNT, but HZNT and HKZ, our wholly owned subsidiaries, have entered into a series of contractual arrangements with JYNT and its shareholders. As a result of the following contractual arrangements, we control and are considered the primary beneficiary of JYNT and, accordingly, we consolidate JYNT’s results of operations in our financial statements. The following is a summary of the currently effective contracts among our wholly owned subsidiaries HZNT and HKZ, our VIE JYNT, and the VIE’s two nominee shareholders, Pu Yue and Liang Yuejing.

Loan Agreements: pursuant to loan agreements dated June 30, 2007, HKZ extended loans of RMB 484,500 and 25,500 respectively to Pu Yue and Liang Yuejing. Upon the occurrence of an event of default or otherwise, HKZ may at its discretion, issue a repayment notice to Pu Yue and/or Liang Yuejing requesting repayment of all or any portion of the loans (as applicable). Pu Yue and Liang Yuejing may only repay the loan by transferring their equity interests in JYNT to HKZ or HKZ’s designees within 5 business days.

Exclusive Service Agreements: pursuant to exclusive service agreements between JYNT and HZNT, JYNT engages HZNT to be its sole and exclusive provider of management, consulting, training and technical services. Service fees are to be paid monthly by JYNT to HZNT in an amount equal to JYNT’s net profits minus the profit to be retained by JYNT as determined by a reputable CPA agreed to by both parties. The exclusive service agreements shall continue indefinitely unless terminated by HZNT with 30 days’ prior written notice or by a non-breaching party after the breaching party has not rectified the breach for within 30 days of its receipt of notice from the non-breaching party. As of December 31, 2010, JYNT has not paid any service fees to HZNT, since JYNT, as a passive company, had not received any dividends from the two joint ventures, Binzhou Broadcasting and Hubei Chutian by the end of 2010. On the contrary, JYNT incurred a loss of $63,900 in fiscal year 2010.

Equity Option Agreements: pursuant to equity option agreements dated July 20, 2007, the shareholders of JYNT have granted HZNT an exclusive and irrevocable option to purchase all or part of their equity interests in JYNT at any time. The option may only be terminated by mutual consent or at the direction of HZNT. HZNT may exercise this option at any time until it has acquired all equity interests of JYNT and it can set off the purchase price against the loan repayment under the loan agreement. The shareholders of JYNT covenant that they will not approve any plan by JYNT to distribute dividends or otherwise seek to influence JYNT’s management, and must approve any action requested by HZNT in writing to the extent permitted by law.

Equity Pledge Agreements: pursuant to equity pledge agreements entered into between HZNT and each of Pu Yue and Liang Yuejing, respectively, dated July 20, 2007, Pu Yue and Liang Yuejing pledge their entire equity interests in JYNT to guarantee JYNT’s payment obligation under the exclusive service agreement between JYNT and HZNT, and the loan agreement, and their performance of their own obligations under the Option Agreement. HZNT is entitled to (i) collect dividends and other distributions, if any, arising from the pledged equity interests; and (ii) in an event of default, freely sell the pledged equity interests and collect the proceeds therefrom. Without HZNT’s consent, the shareholders of JYNT may not (i) transfer or pledge their equity interests in JYNT, (ii) receive any dividends, loan interest or other benefits from JYNT, or (iii) make any material adjustment or change to JYNT’s business or operations. We have duly signed the equity pledge agreements, but have not yet registered the equity pledges under the equity pledge agreements with the local competent branch of the State Administration for Industry and Commerce. Thus, the equity pledge agreements are contractually binding but the equity pledges thereunder have not yet been validated. Please see “Risk Factor - Risks Relating to Our Corporate Structure”.

Power of Attorney: pursuant to a power of attorney signed by Pu Yue and Liang Yuejing, Pu Yue and Liang Yuejing appointed HKZ’s designee as their attorneys-in-fact to exercise all voting rights as shareholders of JYNT, including the ability to vote as a shareholder of JYNT, sell or transfer their equity interest in JYNT and designate and appoint the directors, general manager, chief financial officer and other senior officers of JYNT. This power of attorney is effective until the earlier of 2027 or the termination of the loan agreement between HKZ and the two nominee shareholders.

ITEM 5.

OPERATING AND FINANCIAL REVIEW AND PROSPECTS

Overview

China Cablecom Ltd., a British Virgin Islands company, was incorporated on October 6, 2006. On April 9, 2008, China Cablecom Ltd. and Jaguar Acquisition Corporation (“Jaguar”), a special purpose acquisition company, completed both the previously announced redomestication merger of Jaguar in the British Virgin Islands as China Cablecom Holdings and the concurrent business combination merger with China Cablecom Ltd.

In accordance with the merger agreement, the following occurred with respect to the outstanding Class A Preference shares and common shares of China Cablecom Ltd. and the common shares and warrants of Jaguar:

all of the Class A preference shares and common shares of China Cablecom Ltd. were cancelled and each registered owner of outstanding preference shares and common shares of China Cablecom Ltd. automatically become the registered owner of one and 0.6842 shares of our ordinary shares, respectively.

ii)

all of the common shares of Jaguar were cancelled and each registered owner of outstanding common shares of Jaguar automatically become the registered owner of one share of our ordinary shares.

iii)

all the outstanding warrants were assumed by the Company and became exercisable for our ordinary shares at the original exercise price, US$ 5.00.

China Cablecom Ltd. is the 100% shareholder of China Cablecom Company Limited, formerly known as Hong Kong Zhongyouxiantong Co., Ltd. (“HKZ”), incorporated in Hong Kong on May 22, 2007. HKZ owns 100% of Heze Cablecom Network Technology Co., Ltd (“HZNT”) incorporated under the laws of the PRC on October 9, 2007. We are have entered into contractual arrangement with the following Variable Interest Entities (“VIE”) as defined under FASB ASC 810-10:

Jinan Youxiantong Network Technology Co., Ltd. (“JYNT”) incorporated under the laws of the PRC on July 16, 2007.

On October 1, 2007, JYNT entered into an operating partnership through a joint venture with its partner Binzhou SOE, called Binzhou Broadcasting. Binzhou SOE agreed to contribute all of the inventory and property, plant and equipment of Binzhou PRC along with all of their cable business operations in the PRC in exchange for a 51% equity interest in Binzhou Broadcasting. JYNT agreed to acquire the remaining 49% equity interest in Binzhou Broadcasting, as well as receive 60% of the economic benefits in Binzhou Broadcasting, through an exclusive 11% service agreement, for total consideration of approximately $30 million. Although JYNT will receive 60% of the economic benefits in Binzhou Broadcasting, China Cablecom may not consolidate the financial results of Binzhou Broadcasting into its financial statements. JYNT had only contributed $14 million to Binzhou Broadcasting and there was a further capital contribution of $16 million which had been due but not yet settled. This exclusive service agreement provides marketing, strategic consulting and technical support and services for 11% of the net profits of Binzhou Broadcasting. Binzhou SOE receives 40% of the economic benefits or net profits of Binzhou Broadcasting for its interest in the joint venture.

In addition, in accordance with the operating partnership and other agreements (“Framework Agreement”) between JYNT and Binzhou SOE, JYNT was given the ability to control certain aspects of the financing and management of Binzhou Broadcasting. JYNT has a veto right regarding the appointment of the general manager of Binzhou Broadcasting, the right to appoint the chief financial officer of Binzhou Broadcasting and an obligation to provide continued financial resources for investment and capital expenditures for the future expansion of the Binzhou Broadcasting’s operations. The result of these rights and obligations given to JYNT is that China Cablecom and JYNT have the ability to substantially influence the joint venture’s daily operations and financial affairs, appoint their senior executives and approve all matters requiring shareholder vote.

The contractual arrangements between JYNT and Binzhou Broadcasting have an initial term of 20 years. The parties may mutually seek to extend these agreements upon the expiry of the current term. China Cablecom is not aware of any legal impediments that may affect the renewal of these agreements under current PRC laws. In order for China Cablecom to continue to derive the economic benefits from its joint venture interest in the operation of Binzhou Broadcasting, it must renew these contractual agreements.

On June 16, 2008, we announced the phase one acquisition of Hubei Chutian network through a contractual and joint venture agreement similar to that used in the acquisition of Binzhou network.

We, through JYNT, acquired a 49% equity interest in Hubei Chutian, a joint-venture company, operating with its partner in the joint venture, Hubei Chutian Radio and Television Information Network Co., Ltd. (‘‘Hubei SOE’’).

In accordance with the operating partnership and other agreements (“Framework Agreement”) between JYNT and Hubei SOE, JYNT was given the ability to control certain aspects of the financing and management of Hubei Chutian. JYNT has a veto right regarding the appointment of the general manager of Hubei Chutian, the right to appoint the chief financial officer of Hubei Chutian and an obligation to provide continued financial resources for investment and capital expenditures for the future expansion of the Hubei Chutian’s operations. The result of these rights and obligations given to JYNT is that China Cablecom and JYNT have the ability to substantially influence the joint venture’s daily operations and financial affairs, appoint their senior executives and approve all matters requiring shareholder vote.

JYNT also enter into a technical service agreement with Hubei Chutian, JYNT provides marketing, strategic consulting and technical support and services for 11% of the net profits. Together with its 49% equity interest, JYNT effectively received 60% of economic benefits of Hubei Chutian. Although JYNT will receive 60% of the economic benefits in Hubei Chutian, China Cablecom may not consolidate the financial results of Hubei Chutian into its financial statements.

On September 30, 2009 JYNT and Hubei SOE signed a supplement to the Framework which reduces the service fee from 11% to 6% of the net profits and the effective economic benefit received by JYNT to 55%. As noted above, in October 2011, we received an offer from the Hubei SOE to purchase the joint venture interest we hold in Hubei Chutian through JYNT.

Restatement of Consolidated Financial Statements

In response to comments received from the Securities and Exchange Commission, the Company determined that it would be required to restate its previously issued audited consolidated financial statements as of and for the fiscal year ended December 31, 2010 to deconsolidate Hubei Chutian and Binzhou Broadcasting following the transition guidance found in ASC 810-10-65-2 regarding deconsolidation.

A.	Results of operation

The following discussion of our results of operations is based upon our audited consolidated financial statements beginning on Page F-1 on this Annual Report.

Fiscal year ended 2010 compared to fiscal year ended 2009

Management fee income

Management fee income for the year ended December 31, 2010 were $4.5 million, an increase of $3.5 million from $1 million for the year ended December 31, 2009. Management fees were all earned from JYNT.

Share of losses on operating joint ventures

Share of loss on operating joint ventures for the year ended December 31, 2010 were $8.2 million, an increase of $7 million from $1.2 million for the year ended December 31, 2009.

Summarized financial information of Binzhou Broadcasting is as follows for the years ended December 31, 2010 and 2009:

	December 31,			December 31,
	2010			2009
Net sales	$	11,531,348		$	10,659,255
Gross profit		1,797,134			4,439,962
Loss before taxes		(11,350,894	)		(438,850	)
Net loss		(11,459,687	)		(606,310	)

Company's share of net loss		(3,167,830	)		(167,604	)

Summarized financial information of Hubei Chutian is as follows for the years ended December 31, 2010 and 2009:

	December 31,			December 31,
	2010			2009
Net sales	$	42,431,792		$	34,904,026
Gross profit		12,151,561			11,256,097
Loss before taxes		10,852,867			1,749,897
Net loss		10,367,435			2,153,983

Company's share of net loss		(5,080,043	)		(1,055,451	)

General and administrative expenses

General and administrative expenses for the year ended December 31, 2010 were $5.5 million, an increase of $0.5 million from $5.0 million for the year ended December 31, 2009. General and administrative expenses consist primarily of office rental, amortization of deferred offering costs, legal and accounting expenses and salary and welfare expenses in administrative functions such as, finance and senior management.

Interest expenses

Interest expense for the year ended December 31, 2010 was $4.2 million, a decrease of $5.7 million from $9.9 million for the year ended December 31, 2009. The significant decrease of interest expenses was a result of the debt restructures completed in 2009.

Loss before income taxes

Loss before income taxes for the year ended December 31, 2010 was $13.4 million, a decrease of $41.2 million, from $54.6 million for the year ended December 31, 2009. In 2009, the Company incurred a loss on debt extinguishment of $39.7 million.

Liquidity and Capital Resources

As of December 31, 2010, the Company had cash and cash equivalents approximately $0.9 million available for investment and corporate overhead. As we discussed, JYNT had only contributed $14 million to Binzhou Broadcasting and there was a further capital contribution of $16 million which had been due but not yet settled. We are required to seek additional financing of providing loan financial to Binzhou Broadcasting or amend or modify the term of our agreements with Binzhou SOE. The amount of the required financing is approximately $16 million.

As of December 31, 2010, we had following obligations:

·	$4.2 million unsecured notes with 5% annual interest rate. The repayment was scheduled in 8 installments to be paid every 6 months starting from October 15, 2012

·	$16.2 million secured notes with 5% annual interest rate. The repayment was scheduled in 7 installments to be paid every 6 months starting from October 15, 2012.

·	$19.1 million ($10.7M after discount) Senior Secured Notes with 12% annual interest rate. The repayment was scheduled in 6 installments to be paid every 6 months starting from October 15, 2012.

Trend information

Other than as disclosed elsewhere in this Annual Report, we are not aware of any trends, uncertainties, demands, commitments or events that are reasonably likely to have a material effect on our net sales, profitability, liquidity or capital resources, or that caused the disclosed financial information to not necessarily be indicative of future operating results or financial conditions.

Off-balance sheet arrangements

We do not have any off-balance sheet arrangements, any outstanding derivative financial instruments, interest rate swap transactions or foreign currency forward contracts.

Tabular disclosure of contractual obligations

The following table summarizes our contractual commitments as of December 31, 2010 and the effect those commitments are expected to have on our liquidity and cash flow in future periods:

					Payments due by period
US$ Million	Total		Less than one year		1-3 years		3-5 years		More than 5 years

Long-term Debt Obligations		31.1		-		5.1		22.3		3.7

Capital (Finance) Lease Obligations		-		-		-		-		-

Operating Lease Obligations		-		-		-		-		-

Purchase Obligations		-		-		-		-		-

Other Long-Term Liabilities Reflected on the Company's Balance Sheet under the GAAP of the primary financial statements		-		-		-		-		-

Total		31.1		-		5.1		22.3		3.7

Recent Accounting Pronouncements

FASB ASC 810. We adopted FASB ASC 810 on January 1, 2010, which amended the consolidation guidance for variable-interest entities 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. The adoption of this guidance will have a material impact on the consolidated financial position and results of the Company. The Company will be required to deconsolidate certain VIEs that are currently consolidated. The impact of the adoption may be applied retrospectively with a cumulative-effect adjustment to retained earnings as of the beginning of the first year restated, or through a cumulative-effect adjustment on the date of adoption.

In February 2010, the FASB issued Accounting Standards Update 2010-09 “Subsequent Events (Topic 855)” allowing SEC filers to remove the date through which subsequent events have been reviewed. ASU 2010-09 became effective upon issuance, and the adoption of this guidance did not have a material impact on Company’s financial statements.

ITEM 8.

FINANCIAL INFORMATION

A.	Consolidated Statements and Other Financial Information

The Company’s consolidated financial statements are stated in U.S dollars and are prepared in accordance with US GAAP.

Audited Financial Statements

Our consolidated financial statements for the years ended December 31, 2009 and 2010 as required under Item 17 are included immediately following the text of this Annual Report. The audit reports of the Company are included herein immediately preceding the financial statements.

Legal/Arbitration Proceedings

The Directors and the management of the Company do not know of any material, active or pending, legal proceedings against them; nor is the Company involved as a plaintiff in any material proceeding or pending litigation.

Policy on Dividend Distributions

The Company has not paid any dividends on its outstanding common shares since its incorporation and does not anticipate that it will do so in the foreseeable future. The payment of dividends in the future, if any, is within the discretion of the Board of Directors of Dynasty and will depend upon our earnings, our capital requirements and financial condition and other relevant factors. We do not anticipate declaring or paying any dividends in the foreseeable future.

B.	Significant Changes

None.

ITEM 9.

THE OFFER AND LISTING

A.	Offer and Listing Details

Our ordinary shares are quoted on the OTC Bulletin Board under the symbol “CABLF”. From July 30, 2008 until August 8, 2011, our ordinary shares, warrants and units traded on the Nasdaq Capital Market.

The table below sets forth, for the calendar quarters indicated, the high and low bid prices for the securities as reported on the OTC Bulletin Board and Nasdaq Capital Market in U.S. dollars. These quotations reflect inter-dealer prices, without markup, markdown or commissions, and may not represent actual transactions.

On February 19, 2010, we announced that our Board of Directors authorized a one-for-three reverse share split of our ordinary shares effective March 2, 2010, at the open of trading.

On March 1, 2010, we announced that effective April 4, 2010, our units would be separated into its component securities, consisting of one ordinary share and two warrants. As a result, beginning April 4, 2010, the Units and Warrants ceased trading. The warrants expired on April 4, 2010 and the reverse stock split was applied to each ordinary share resulting from the expired unit.

	Ordinary Shares
	High		Low
	(US$)		(US$)
2008
First Quarter		22.35		19.29
Second Quarter		19.05		17.70
Third Quarter		21.00		6.51
Fourth Quarter		7.65		1.77
2009
First Quarter		2.61		0.45
Second Quarter		5.82		0.78
Third Quarter		4.14		1.14
Fourth Quarter		3.30		1.41
2010
First Quarter		2.37		1.40
Second Quarter		1.68		0.77
Third Quarter		0.83		0.36
Fourth Quarter		0.80		0.44
2011
First Quarter		0.60		0.38
Second Quarter		0.43		0.21
Third Quarter		0.28		0.06
Fourth Quarter (through October 27)		0.25		0.08

Holders of ordinary shares should obtain current market quotations for their securities. There can be no assurance that a trading market will develop for these securities.

Status of Outstanding Ordinary Shares. As of October 27, 2011, we had a total of 13,673,689 ordinary shares issued and outstanding.

Holders. As of October 27, 2011 there were, of record, 42 holders of ordinary shares. We believe the number of beneficial holders of each of these securities is significantly greater than the number of record holders.

B.	Plan of Distribution

Not Applicable.

Markets

Our ordinary shares are quoted on the OTCBB under the symbol CABLF.

On March 1, 2010, we announced that effective April 4, 2010, our units (CABLU) will be separated into its component securities, consisting of one ordinary share (CABL) and two warrants. As a result, beginning April 4, 2010, the Units (CABLU) and Warrants (CABLW) ceased trading. The warrants expired on April 4, 2010 and the reverse stock split was applied to each ordinary share resulting from the expired unit.

D.	Selling Shareholders

Not Applicable.

Dilution

Not Applicable.

F.	Expenses of the Issue

Not Applicable.

ITEM 15.

CONTROLS AND PROCEDURES

(a)	Evaluation of Disclosure Controls and Procedures

At the time our Annual Report for the fiscal year ended December 31, 2010 was filed on July 28, 2011, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective as of December 31, 2010. In connection with the filing of this Amendment No. 1, such officers re-evaluated the effectiveness of the design and operation of our disclosure controls and procedures (as defined under Rules 13a-15(e) and 15d-15(e) promulgated under the Securities Exchange Act of 1934, as amended) as of the end of the period covered by that report. Subsequent to that evaluation, our management, including our Chief Executive Officer and Chief Financial Officer, re-assessed the conclusion expressed in such evaluation and the effectiveness of the design and operation of our disclosure controls and procedures (as defined under Rules 13a-15(e) and 15d-15(e) promulgated under the Securities Exchange Act of 1934, as amended) as of the end of the period covered by this report. Based upon that re-assessment, our Chief Executive Officer and Chief Financial Officer have concluded that our disclosure controls and procedures were not effective to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements because of the identification of material weaknesses in our internal control over financial reporting described further below.

(b)	Management’s annual report on internal control over financial reporting

Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as defined in Rule 13a-15(f) under the Exchange Act. Our management evaluated the effectiveness of our internal control over financials reporting based on criteria established in the framework in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Based on this evaluation, our management has identified certain material weaknesses in connection with the preparation of our consolidated financial statements as of and for the fiscal year ended December 31, 2010 and have thus concluded that our internal controls over financial reporting were not effective. A "material weakness" is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the company's annual or interim financial statements will not be prevented or detected on a timely basis.

This material weakness and control deficiency identified primarily related to lack of sufficient accounting personnel with appropriate knowledge of U.S. GAAP.

The persons responsible for the preparation of our books and records and financial statements, principally our Chief Financial Officer, Sikan Tong, and the accountants under his supervision, do not have the requisite U.S. GAAP experience to prepare financial statements in accordance with U.S. GAAP. In this regard, Mr. Tong and the other accountants do not hold a license such as Certified Public Accountant in the US., have not attended U.S. institutions or extended educational programs that would provide a sufficient relevant education in U.S. GAAP, and most of their US. GAAP audit experience, if any, primarily consists of audits of subsidiary financial information that supports or is included in the U.S. GAAP financial statements of parent registrants. The fact that we hired consultants to assist us in assessing our internal control over financial reporting does not mitigate the fact that the accounting department does not possess the requisite U.S. GAAP knowledge to prepare financial statements in accordance with U.S. GAAP.

Following the identification of the material weakness and other control deficiencies, we have taken measures and plan to continue to take measures to remedy the weakness and deficiencies, including (1) hiring additional accounting personnel with understanding of U.S. GAAP and experience with SEC reporting requirements, and (2) providing external and internal training to our accounting personnel. However, the implementation of these measures may not fully address this material weakness and other control deficiencies in our internal control over financial reporting, and we cannot conclude that they have been fully remedied. We are not able to estimate with reasonable certainty the costs that we will need to incur to implement these and other measures designed to improve our internal control over financial reporting. If we fail to establish an effective system of internal controls, we may be unable to accurately report our financial results or prevent fraud, and investor confidence and the market price of our equity and/or debt may be adversely impacted.

Because of its inherent limitations, any system of internal controls over financial reporting may not prevent or detect misstatements. In addition, projections of any evaluation of effectiveness of our internal control over financial reporting 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 and procedures may deteriorate.

This annual report does not include an attestation report of the company’s registered public accounting firm regarding internal control over financing reporting due to rules of the SEC for a non-accelerated filer that permit us to provide only management’s report in this annual report.

(c)	Attestation report of the register public accounting firms

Not applicable.

(d)	Changes in Internal Controls over Financial Reporting

There were no changes in our internal control over financial reporting (as defined in Rule 13a-15(f) of the Exchange Act) that occurred during the year ended December 31, 2010 that have materially affected, or are reasonably likely to materially affect, our internal controls over financial reporting. It should be noted that while our management believes that our disclosure controls and procedures provide a reasonable level of assurance; our management does not expect that our disclosure controls and procedures or internal financial controls will prevent all errors or fraud. A control system, no matter how well conceived or operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met.

PART III

ITEM 17.

FINANCIAL STATEMENTS

Our audited Financial Statements are included as the “F” pages attached to this report.

All financial statements in this Annual Report, unless otherwise stated, are presented in accordance with US GAAP.

ITEM 18.

FINANCIAL STATEMENTS

The Company has elected to provide financial statements pursuant to ITEM 17.

ITEM 19.

EXHIBITS

Exhibit Number		Description of Exhibit
1.1		China Cablecom Holdings Amended and Restated Memorandum of Association
1.2		China Cablecom Holdings Amended and Restated Articles of Association
2.1 (1)		Specimen Unit Certificate
2.2 (1)		Specimen Ordinary Share Certificate
2.3 (1)		Form of Unit Purchase Option
2.4 (1)		Form of Warrant
2.5 (2)		Form of Warrant Agreement
4.1 (1)		The China Cablecom Holdings 2007 Omnibus Securities and Incentive Plan
4.2 (1)		Warrants Exercise Proceeds Award Agreement between China Cablecom Holdings and James S. Cassano
4.3 (1)		Warrants Exercise Proceeds Award Agreement between China Cablecom Holdings and Kerry Proper
4.4 (1)		Warrants Exercise Proceeds Award Agreement between China Cablecom Holdings and Jonathan Kalman
4.5 (1)		Warrants Exercise Proceeds Award Agreement between China Cablecom Holdings and Clive Ng
4.6 (1)		Incentive Share Agreement between China Cablecom Holdings and James S. Cassano
4.7 (1)		Incentive Share Agreement between China Cablecom Holdings and Kerry Proper
4.8 (1)		Incentive Share Agreement between China Cablecom Holdings and Jonathan Kalman
4.9 (1)		Form of Consulting Agreement between China Cablecom Holdings and China Cablecom Holdings Limited, a Cayman Islands limited company
4.10 (1)		Form of Employment Agreement between China Cablecom Holdings and Clive Ng
4.11 (1)		Promissory Note from China Cablecom to Jaguar in the initial principal amount of $475,000
4.12 (1)		Purchase Agreement, dated as of September 19, 2007, by and among China Cablecom Ltd. and the entities listed on the Schedule of Investors attached thereto as Schedule I
4.13 (1)		Form of First Closing Promissory Note
4.14 (1)		Registration Rights Agreement, dated September 19, 2007, by and among China Cablecom Ltd. and the entities listed on the Schedule A attached thereto
4.15 (1)		Share Pledge Agreement, dated as of September 19, 2007, by Clive Ng in favor of the persons and entities listed on the Schedule of Investors attached thereto as Schedule III
4.16 (2)		Form of Registration Rights Agreement among the Registrant and the Initial Stockholders
4.17( 2)		Form of Stock Escrow Agreement between the Registrant, Continental Stock Transfer & Trust Company and the Initial Stockholders
4.18 (2)		Letter Agreement among the Registrant, Early Bird Capital, Inc. and Jonathan Kalman
4.19 (2)		Letter Agreement among the Registrant, Early Bird Capital, Inc. and C. Richard Corl

4.20 (2)		Letter Agreement among the Registrant, Early Bird Capital, Inc. and James S. Cassano
4.21 (2)		Letter Agreement among the Registrant, Early Bird Capital, Inc. and John J. Hoey
4.22 (2)		Letter Agreement among the Registrant, Early Bird Capital, Inc. and William J. Westervelt, Jr.
4.23 (2)		Letter Agreement among the Registrant, Early Bird Capital, Inc. and David W. Tralka
4.24 (2)		Letter Agreement among the Registrant, Early Bird Capital, Inc. and Robert Moreyra
4.25 (2)		Letter Agreement among the Registrant, Early Bird Capital, Inc. and Peter Collins
4.26 (2)		Letter Agreement among the Registrant, Early Bird Capital, Inc. and Sapphire Canyon Investments LLC
4.27 (2)		Letter Agreement among the Registrant, Early Bird Capital, Inc. and Corl LLC
4.28 (2)		Letter Agreement among the Registrant, Early Bird Capital, Inc. and JSC Group Holdings LLC
4.29 (2)		Letter Agreement among the Registrant, Early Bird Capital, Inc. and PA Holdings, LLC
4.30 (1)		Framework Agreement by and between Binzhou Broadcasting and Television Network Co., Ltd. and Jinan Youxiantong Network Technology Co., Ltd., August 2007
4.31 (1)		Asset Transfer Agreement by and between Binzhou Broadcasting and Television Network Co., Ltd. and Binzhou Broadcast and Television Information Network Co., Ltd., September 2007
4.32 (1)		Exclusive Service Agreement between Binzhou Broadcasting and Television Network Co., Ltd. and Binzhou Broadcast and Television Information Network Co., Ltd., September 2007
4.33 (1)		Technical Services Agreement between Binzhou Broadcast and Television Information and Network Co., Ltd. and Jinan Youxiantong Network Technology Co., Ltd., September 2007
4.34 (1)		Equity Option Agreement by and between Heze Cablecom Network Technology Co., Ltd. and Liang Yue Jing, July 2007
4.35 (1)		Equity Option Agreement by and between Heze Cablecom Network Technology Co., Ltd. and Pu Yue, July 2007
4.36 (1)		Equity Pledge Agreement by and between Heze Cablecom Network Technology Co., Ltd. and Lian Yue Jing, July 2007
4.37 (1)		Equity Pledge Agreement by and between Heze Cablecom Network Technology Co., Ltd. and Pu Yue, July 2007
4.38 (1)		Loan Agreement by and between China Cablecom Co. Ltd. (Hong Kong) and Liang Yue-Jing, June 2007
4.39 (1)		Loan Agreement by and between China Cablecom Co. Ltd. (Hong Kong) and Pu Yue, June 2007
4.40 (1)		Power of Attorney granted by Lian Yue Jing, July 16, 2007
4.41 (1)		Power of Attorney granted by Pue Yue, July 16, 2007
4.42 (1)		Trustee Arrangement Letter, by and between China Cablecom Co., Ltd. (Hong Kong) and Lian Yue Jing, June 30, 2007
4.43 (1)		Trustee Arrangement Letter, by and between China Cablecom Co., Ltd. (Hong Kong) and Pu Yue, June 30, 2007
4.44 (1)		Supplementary Agreement to the Framework Agreement, by and between Binzhou Broadcasting and Television Network, Co., Ltd. and Jinan Youxiantong Network Technology Co. Ltd., dated August 6, 2007
4.45 (3)		Settlement Agreement by and between China Broadband, Inc., China Broadband, Ltd., China Broadband, Inc., 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. dated January 9, 2008
4.46 (1)		Form of Voting Agreement by and between Jaguar Acquisition Corporation, China Cablecom Holdings, Ltd., Certain Shareholders of Jaguar Acquisition Corporation and Clive Ng.
4.47 (1)		Form of Employment Agreement by and between China Cablecom Holdings, Ltd. and Pu Yue.
4.48 (4)		Unit Purchase Option Clarification Agreement dated as of January 30, 2008 by Jaguar Acquisition Corporation.
4.49 (4)		Warrant Clarification Agreement dated January 30, 2008 by and between Jaguar Acquisition Corporation and Continental Stock Transfer & Trust Company.
4.50 (5)		Offshore Loan Agreement between China Cablecom and Rich Dynamic Limited, dated June 10, 2008.
4.51 (6)		Offshore Loan Agreement between China Cablecom and Rich Dynamic Limited, dated July 29, 2008.
4.52 (7)		Onshore Loan Agreement between Dong Wanling and JYNT, dated June 10, 2008.

4.53 (8)		Onshore Loan Agreement between Dong Wanling and JYNT, dated June 10, 2008.
4.54		Supplement to Framework Agreement dated September 29, 2009
4.55		Form of Hubei Chutian Loan Agreement dated September 29, 2009
4.56		Subscription Agreement dated October 9, 2009
4.57		Form of New Note
4.58		New Notes Security Agreement
4.59		Senior Secured Subsidiary Guaranty
4.60		Collateral Agent Agreement
4.61		Intercreditor Agreement dated October 9, 2009
4.62		Warrant for Chardan Capital Markets LLC
4.63		Secured Notes Exchange and Waiver Agreement dated October 9, 2009
4.64		Form of New Junior Secured Notes
4.65		Junior Secured Security Agreement dated October 9, 2009
4.66		Junior Secured Subsidiary Guaranty dated October 9, 2009
4.67		Unsecured Notes Exchange and Waiver Agreement dated October 9, 2009
4.68		Form of New Unsecured Notes
4.69		Unsecured Notes Subsidiary Guaranty dated October 9, 2009
8.1 (9)		List of subsidiaries
11.1 (10)		China Cablecom Holdings Ltd. Code of Business Conduct and Ethics
12.1		Certification of Chief Executive Officer required by Section 302 of the Sarbanes-Oxley Act of 2002.
12.2		Certification of Chief Financial Officer required by Section 302 of the Sarbanes-Oxley Act of 2002.
13.1		Certification of Chief Executive Officer and Chief Financial Officer required by Section 906 of the Sarbanes-Oxley Act of 2002.

(1)	Incorporated by reference to the Company’s Registration Statement on Form S-4 (Registration No. 333-147038).

(2)	Incorporated by reference to Jaguar Acquisition Corp. Registration Statement on Form S-1 (Registration No. 333-127135).

(3)	Incorporated by reference to Exhibit No. 10.1 to the Current Report on Form 8-K filed with the SEC by China Broadband, Inc. on January 17, 2008.

(4)	Incorporated by reference to the Quarterly Report on Form 10-QSB filed with the SEC by Jaguar Acquisition Corp. on February 14, 2008.

(5)	Incorporated by reference to Exhibit No. 4.50 to the Annual Report on Form 20-F filed on July 15, 2009.

(6)	Incorporated by reference to Exhibit No. 4.51 to the Annual Report on Form 20-F filed on July 15, 2009.

(7)	Incorporated by reference to Exhibit No. 4.52 to the Annual Report on Form 20-F filed on July 15, 2009.

(8)	Incorporated by reference to Exhibit No. 4.53 to the Annual Report on Form 20-F filed on July 15, 2009.

(9)	Incorporated by reference to Exhibit No. 8.1 of the Annual Report on Form 20-F filed on July 15, 2009.

(10)	Incorporated by reference to Exhibit No. 11.1 of the Annual Report on Form 20-F filed on July 15, 2009.

SIGNATURES

The Registrant hereby certifies that it meets all of the requirements for filing on Form 20-F and that it has duly caused and authorized the undersigned to sign this annual report on its behalf.

CHINA CABLECOM HOLDINGS, LTD

By:	/s/ Pu Yue	By:	/s/ Sikan Tong
Name:	Pu Yue	Name:	Sikan Tong
Title:	Chief Executive Officer	Title:	Chief Financial Officer
Date:	October 31, 2011	Date:	October 31, 2011

CHINA CABLECOM HOLDINGS, LTD.

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

	Page

Report of Independent Registered Public Accounting Firm	F-1
Consolidated Balance Sheets	F-2
Consolidated Statements of Operations	F-3
Consolidated Statements of Comprehensive Loss	F-4
Consolidated Statements of Changes in Stockholders’ Equity (Deficiency)	F-5 – F-6
Consolidated Statements of Cash Flows	F-7 – F-8
Notes to Consolidated Financial Statements	F-9

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Shareholders

China Cablecom Holdings, Ltd.

We have audited the accompanying consolidated balance sheets of China Cablecom Holdings, Ltd and Subsidiaries (the “Company”) as of December 31, 2010, 2009 and 2008, and the related consolidated statements of operations, comprehensive loss, changes in stockholders’ equity (deficiency) and cash flows for the three years ended December 31, 2010, 2009 and 2008. 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 Cablecom Holdings, Ltd and Subsidiaries as of December 31, 2010 and 2009, and the results of their operations and their cash flows for the three years ended December 31, 2010, 2009 and 2008 in conformity with accounting principles generally accepted in the United States of America.

As described in Note 3, the Company reassessed the guidance on consolidation of variable interest entities and determined that the Company was not the primary beneficiary of certain variable interest entities that has been consolidated previously. As a result, the Company determined to deconsolidate certain variable interest entities. The impact of the deconsolidation shall be applied retrospectively with a cumulative-effect adjustment to retained earnings as of the beginning of the first year restated. The Company had applied the guidance and restated its financial statement for the year ended December 31, 2010, 2009 and 2008 to conform with the standards of the Public Company Accounting Oversight Board (United States).

The accompanying consolidated financial statements have been prepared assuming the Company will continue as a going concern. As discussed in Note 5 to the consolidated financial statements, the Company has incurred significant losses during 2010, 2009 and 2008, 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 5. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

/s/ UHY Vocation HK CPA Limited

UHY Vocation HK CPA Limited

Certified Public Accountants

Hong Kong, July 28, 2011 (October 31, 2011 as to the effect of the restatement discussed in Note 3)

(THE PEOPLE'S REPUBLIC OF CHINA)

F-1

CHINA CABLECOM HOLDINGS, LTD.

CONSOLIDATED BALANCE SHEETS

	December 31, 2010			December 31, 2009			December 31, 2008
	(restated)			(restated)			(restated)
ASSETS
Current Assets:
Cash and cash equivalents	$	929,072		$	6,992,541		$	9,426,952
Prepaid expenses and advances		3,646,390			6,075,149			6,856,025
Total Current Assets		4,575,462			13,067,690			16,282,977

Property, plant & equipment, net		138,230			159,395			202,060
Investment in operating joint ventures		64,026,705			66,102,750			40,044,610
Other Assets:
Deferred financing costs, net		1,643,943			1,987,215			1,243,923
Total Assets	$	70,384,340		$	81,317,050		$	57,773,570

LIABILITIES AND SHAREHOLDERS’ EQUITY
Current Liabilities:
Promissory note – net of discount	$	-		$	-		$	9,481,940
Other current liabilities		2,069,466			508,441			790,347
Amount due to Hubei Chutian		7,050,397			10,733,508			-
Total Current Liabilities		9,119,863			11,241,949			10,272,287
Long Term Liabilities:
Convertible notes		-			-			16,684,044
Senior secured notes		10,633,911			7,973,096			-
Secured notes		16,159,035			17,062,563			-
Unsecured notes		4,218,128			5,134,795			-
Total Liabilities		40,130,937			41,412,403			26,956,331

COMMITMENTS AND CONTINGENCIES		-			-			-

STOCKHOLDERS' EQUITY
Series A convertible preferred shares, $.0005 par value; 70,000,000 authorized shares, 55,615,780 shares issued and outstanding (December 31, 2009 62,161,965 shares issued, December 31, 2008: none issued)		27,808			31,081			-
Series B convertible preferred shares, $.0005 par value; 25,000,000 authorized shares, 14,824,683 shares issued and outstanding (December 31, 2009 23,158,080 shares issued, December 31, 2008: none issued)		7,412			11,579			-
Ordinary shares, $.0015 par value; 51,666,667 authorized shares, 11,373,241 shares issued and outstanding (December 31, 2009 4,688,151 shares issued, December 31, 2008: 3,225,711 shares issued)		17,060			7,033			4,839
Additional paid-in capital		114,368,149			109,452,870			45,526,562
Accumulated deficit		(84,572,062	)		(70,164,375	)		(15,295,384	)
Accumulated other comprehensive income		405,036			566,459			581,222

Total stockholders’ equity		30,253,403			39,904,647			30,817,239
Total liabilities and stockholders’ equity	$	70,384,340		$	81,317,050		$	57,773,570

See accompanying notes to consolidated financial statements

F-2

CHINA CABLECOM HOLDINGS, LTD.

CONSOLIDATED STATEMENTS OF OPERATIONS

	For the year ended			For the year ended			For the year ended
	December 31, 2010			December 31, 2009			December 31, 2008
	(restated)			(restated)			(restated)

Management fee income	$	4,450,438		$	1,004,596		$	-
Share of (loss)/profit on operating joint ventures		(8,247,873	)		(1,223,055	)		89,347
		(3,797,435	)		(218,459	)		89,347
Operating expenses
General and administrative expenses		5,450,965			4,966,132			5,271,418
Total operating expenses		5,450,965			4,966,132			5,271,418
Loss from operations		(9,248,400	)		(5,184,591	)		(5,182,071	)

Other income / (expenses)
Interest income		10,566			61,651			225,690
Interest expense		(4,211,707	)		(9,855,474	)		(8,654,652	)
Loss on debt extinguishment		-			(39,663,466	)		-
Other income		17,566			3,456			201,199
Total other expenses		(4,183,575	)		(49,453,833	)		(8,227,763	)
Loss before income taxes		(13,431,975	)		(54,638,424	)		(13,409,834	)
Income taxes expenses		(975,712	)		(230,567	)		(717	)
Net loss	$	(14,407,687	)	$	(54,868,991	)	$	(13,410,551	)

Net loss per ordinary share:
- Basic and fully diluted	$	(1.97	)	$	(16.18	)	$	(5.42	)

Weighted average number of shares
- Basic and fully diluted		7,327,475			3,391,924			2,472,504

See accompanying notes to consolidated financial statements

F-3

CHINA CABLECOM HOLDINGS, LTD.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS

	For the year ended			For the year ended			For the year ended
	December 31, 2010			December 31, 2009			December 31, 2008
	(restated)			(restated)			(restated)

Net loss	$	(14,407,687	)	$	(54,868,991	)	$	(13,410,551	)
Other comprehensive (loss)/income, net of tax:
Foreign currency translation adjustment
- Company		324,588			(1,345	)		403,401
- operating joint ventures		(486,011	)		(13,418	)		22,263
Total other comprehensive (loss)/income, net of tax		(161,423	)		(14,763	)		425,664
Comprehensive loss attributable to the Company	$	(14,569,110	)	$	(54,883,754	)	$	(12,984,887	)

See accompanying notes to consolidated financial statements

F-4

CHINA CABLECOM HOLDINGS, LTD.

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (DEFICIENCY)

For the years ended December 31, 2010, 2009 and 2008

	Preferred Shares						Series A Preferred Shares						Series B Preferred Shares				Ordinary shares				Additional Paid-in		Accumulated			Accumulated Other Comprehensive			Total Shareholders’
	Shares			Amount			Shares			Amount			Shares		Amount		Shares		Amount		Capital		Deficit			Income			Equity

Balance as December 31, 2007 (restated)		766,680		$	383			-		$	-			-	$	-		633,334	$	950	$	3,575,737	$	(1,884,833	)	$	155,558		$	1,847,795

Recapitalization – reverse merger		(766,680	)		(383	)		-			-			-		-		1,961,012		2,941		22,131,052		-			-			22,133,610

Allocation of proceeds from issuance of convertible notes – incentive shares		-			-			-			-			-		-		508,331		763		9,079,667		-			-			9,080,430

Warrants exercised		-			-			-			-			-		-		16,367		25		245,475		-			-			245,500

Issuance of ordinary shares as finder’s fee		-			-			-			-			-		-		106,667		160		1,951,840		-			-			1,952,000

Allocation of proceeds from issuance of convertible notes – beneficial conversion feature		-			-			-			-			-		-		-		-		8,542,791		-			-			8,542,791

Net loss for 2008		-			-			-			-			-		-		-		-		-		(13,410,551	)		-			(13,410,551	)

Cumulative translation adjustment		-			-			-			-			-		-		-		-		-		-			425,664			425,664

Balance as December 31, 2008 (restated)		-		$	-			-		$	-			-	$	-		3,225,711	$	4,839	$	45,526,562	$	(15,295,384	)	$	581,222		$	30,817,239

Issuance of Preferred Shares related to debt restructure		-			-			65,799,285			32,900			-		-		-		-		51,290,543		-			-			51,323,443

Issuance of Preferred Shares related to issue of Senior Secured notes, net of issuance costs		-			-			-			-			23,158,080		11,579		-		-		10,530,960		-			-			10,542,539

Share issued as payment for broker fee		-			-			-			-			-		-		250,000		375		584,625		-			-			585,000

Conversion of Series A Preferred Shares		-			-			(3,637,320	)		(1,819	)		-		-		1,212,440		1,819		1,302,642		-			-			1,302,642

Stock option compensation expenses		-			-			-			-			-		-		-		-		217,538		-			-			217,538

Net loss for 2009		-			-			-			-			-		-		-		-		-		(54,868,991	)		-			(54,868,991	)

Cumulative translation adjustment		-			-			-			-			-		-		-		-		-		-			(14,763	)		(14,763	)

Balance at December 31, 2009 (restated)		-		$	-			62,161,965		$	31,081			23,158,080	$	11,579		4,688,151	$	7,033	$	109,452,870	$	(70,164,375	)	$	566,459		$	39,904,647

See accompanying notes to consolidated financial statements

F-5

CHINA CABLECOM HOLDINGS, LTD.

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (DEFICIENCY)

For the years ended December 31, 2010, 2009 and 2008

	Preferred Shares				Series A Preferred Shares						Series B Preferred Shares						Ordinary shares				Additional Paid-in		Accumulated			Accumulated Other Comprehensive			Total Shareholders’
	Shares		Amount		Shares			Amount			Shares			Amount			Shares		Amount		Capital		Deficit			Income			Equity

Balance as December 31, 2009 (restated)		-	$	-		62,161,965		$	31,081			23,158,080		$	11,579			4,688,151	$	7,033	$	109,452,870	$	(70,164,375	)	$	566,459		$	39,904,647

Share issued as payment for interest		-		-		-			-			-			-			1,500,225		2,249		1,089,803		-			-			1,092,052

Share issued as payment for legal fee		-		-		-			-			-			-			225,000		338		325,913		-			-			326,251

Conversion of Preferred Shares		-		-		(6,546,185	)		(3,273	)		(8,333,397	)		(4,167	)		4,959,865		7,440		1,820,195		-			-			1,820,195

Stock option compensation expenses		-		-		-			-			-			-			-		-		1,679,368		-			-			1,679,368

Net loss for 2010		-		-		-			-			-			-			-		-		-		(14,407,687	)		-			(14,407,687	)

Cumulative translation adjustment		-		-		-			-			-			-			-		-		-		-			(161,423	)		(161,423	)

Balance at December 31, 2010 (restated)		-	$	-		55,615,780		$	27,808			14,824,683		$	7,412			11,373,241	$	17,060	$	114,368,149	$	(84,572,062	)	$	405,036		$	30,253,403

See accompanying notes to consolidated financial statements

F-6

CHINA CABLECOM HOLDINGS, LTD.

CONSOLIDATED STATEMENTS OF CASH FLOWS

	For the year ended			For the year ended			For the year ended
	December 31, 2010			December 31, 2009			December 31, 2008
	(restated)			(restated)			(restated)
Cash Flows From Operating Activities:
Net loss	$	(14,407,687	)	$	(54,868,991	)	$	(13,410,551	)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation		68,128			62,934			40,871
Share of loss / (profit) on operating joint ventures		8,247,873			1,223,055			(89,347	)
Stock compensation expenses		1,679,368			217,538			-
Loss on debt restructuring		-			39,663,466			-
Amortization of deferred financing costs		343,272			636,299			1,209,775
Interest expenses - Interest for Senior secured notes, Secured and Unsecured notes		3,714,142			777,036			-
Interest expenses - Amortization of note payable discount		-			1,644,124			2,382,632
Interest expenses - Amortization of convertible note discount		-			7,310,878			4,910,547
Prepaid expenses and advances		2,141,867			780,876			(6,264,688	)
Amount due to Hubei Chutian		(3,683,111	)		10,733,508			-
Other current liabilities		1,926,001			173,298			(572,825	)
Net cash provided by / (used in) operating activities		29,853			8,354,021			(11,793,586	)

Cash Flows From Investing Activities:
Purchase of property, plant and equipment		(43,645	)		(20,069	)		(163,126	)
Capital investment in operating joint ventures		(6,657,839	)		(27,294,613	)		(35,434,838	)
Payment received on note receivable – related party		-			-			475,000
Net cash used in investing activities		(6,701,484	)		(27,314,682	)		(35,122,964	)

Cash Flows From Financing Activities:
Financing cost incurred		-			(2,066,215	)		-
Cash received from offshore loan		286,892			-			-
Issuance cost of senior debts		-			(545,990	)		-
Proceeds from issuance of senior secured notes		-			33,000,000			-
Proceeds from reverse merger with Jaguar, net		-			-			23,105,232
Proceeds from issuance of convertible notes		-			-			19,050,610
Proceeds from issuance of ordinary shares		-			-			11,277,930
Early redemption of senior secured notes		-			(13,860,000	)		-
Repayment of notes payable		-			-			(9,996,160	)
Net cash provided by financing activities		286,892			16,527,795			43,437,612
Effect of exchange rate changes on cash		321,270			(1,545	)		397,700
Net decrease in cash		(6,063,469	)		(2,434,411	)		(3,081,238	)
Cash and cash equivalents at beginning of period		6,992,541			9,426,952			12,508,190
Cash and cash equivalents at end of period	$	929,072		$	6,992,541		$	9,426,952

See accompanying notes to consolidated financial statements

F-7

CHINA CABLECOM HOLDINGS, LTD.

CONSOLIDATED STATEMENTS OF CASH FLOWS

	For the year ended		For the year ended		For the year ended
	December 31, 2010		December 31, 2009		December 31, 2008
	(restated)		(restated)		(restated)
Supplemental cash flow information:
Interest paid	$	-	$	-	$	220
Income taxes paid	$	24	$	361	$	604
Value assigned to shares issued as payment for broker fee	$	-	$	585,000	$	-
Value assigned to shares issued as payment for legal fee	$	326,251	$	-	$	-
Value assigned to shares issued as payment for interest expense	$	1,092,052	$	-	$	-

Non-cash financing activities related to restructuring of debt (Note 2):
Cancellation of promissory note and interest	$	-	$	11,851,678	$	-
Cancellation of convertible note and interest	$	-	$	23,308,298	$	-
Issuance of secured notes	$	-	$	18,000,000	$	-
Issuance of unsecured notes	$	-	$	5,500,000	$	-
Issuance of Series A Convertible Preferred Shares	$	-	$	51,323,443	$	-
Non-cash financing activities related to private financings (Note 2):
Issuance of Series B Convertible Preferred Shares	$	-	$	15,045,953	$	-

Reduction of Notes as the result of conversion of Preferred Shares to Ordinary Shares	$	1,820,195	$	1,302,642	$	-

See accompanying notes to consolidated financial statements

F-8

CHINA CABLECOM HOLDINGS, LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1.	Organization and Basis of Preparation of Financial Statements

China Cablecom Ltd. was incorporated under the laws of the British Virgin Islands on October 6, 2006.

On April 9, 2008, China Cablecom Ltd. and Jaguar Acquisition Corporation ("Jaguar"), a special purpose acquisition company, completed a redomestication merger of Jaguar in the British Virgin Islands as China Cablecom Holdings, Ltd. (the “Company” or “China Cablecom”) and the concurrent business combination merger with China Cablecom Ltd.

Prior to the merger with the Company, Jaguar issued 4,950,000 units (“Units”), each representing one ordinary share and two warrants.

In accordance with the merger agreement, the following occurred with respect to the outstanding Class A Preferred stock and Ordinary shares of China Cablecom Ltd. and the ordinary shares and warrants, including those under the Units, of Jaguar:

i)	all of the Class A preferred stock and ordinary shares of China Cablecom Ltd. were cancelled and each registered owner of outstanding preferred stock and ordinary shares of China Cablecom Ltd. automatically become the registered owner of one and 0.6842 shares of the Company, respectively

ii)	all of the common shares of Jaguar were cancelled and each registered owner of outstanding common shares of Jaguar automatically become the registered owner of one ordinary share of the Company

iii)	all of the outstanding warrants were assumed by the Company and became exercisable for the Company’s current shares at the original exercise price, US$ 5.00 per share.

For financial reporting purposes, this merger transaction was recorded as a recapitalization of China Cablecom Ltd. whereby China Cablecom Ltd. is deemed to be the continuing, surviving entity for accounting purpose, but through reorganization, has deemed to have adopted the capital structure of the Company.

The Company is the 100% shareholder of China Cablecom Company Limited (“HK Cablecom”) incorporated in Hong Kong on May 22, 2007. HK Cablecom owns 100% of Heze Cablecom Network Technology Co., Ltd ("HZNT") incorporated under the laws of the People’s Republic of China (“PRC”) on October 9, 2007.

The Company is also the primary beneficiary of the following Variable Interest Entities (“VIE”) as defined under FASB ASC 810-10:

l	Jinan Youxiantong Network Technology Co. Ltd ("JYNT") incorporated under the laws of the PRC on July 16, 2007.

F-9

CHINA CABLECOM HOLDINGS, LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1. Organization and Basis of Preparation of Financial Statements (Continued)

On October 1, 2007, JYNT entered into an operating partnership through a joint venture with its partner Binzhou SOE, called Binzhou Broadcasting and Television Information Network Co., Ltd (“Binzhou Broadcasting). Binzhou SOE agreed to contribute all of the inventory and property, plant and equipment of Binzhou PRC along with all of their cable business operations in the PRC in exchange for a 51% equity interest in Binzhou Broadcasting. JYNT agreed to acquire the remaining 49% equity interest in Binzhou Broadcasting, as well as receive 11% of the economic benefits in Binzhou Broadcasting, through an exclusive service agreement, for total consideration of approximately $30 million. JYNT had only contributed $14 million to Binzhou Broadcasting and there was a further capital contribution of $16 million had been due but not yet settled. This exclusive service agreement provides marketing, strategic consulting and technical support and services for 11% of the net profits of Binzhou Broadcasting.

The contractual arrangements between JYNT and Binzhou Broadcasting have an initial term of 20 years. The parties may mutually seek to extend these agreements upon the expiration of the current term. China Cablecom is not aware of any legal impediments that may affect the renewal of these agreements under current PRC laws. In order for China Cablecom to continue to derive the economic benefits from its joint venture interest in the operation of Binzhou Broadcasting, it must renew these contractual agreements.

On June 16, 2008, the Company announced the phase one acquisition of Hubei Chutian Video Communication Network Co., Ltd (“Hubei Chutian”) through a contractual and joint venture agreement similar to that used in the acquisition of Binzhou network. The Company, through JYNT, acquired a 49% equity interest in Hubei Chutian, a joint-venture company, operating with its partner in the joint venture, Hubei Chutian Radio and Television Information Network Co., Ltd. (‘‘Hubei SOE’’). JYNT also entered into a technical service agreement with Hubei Chutian whereby JYNT provides marketing, strategic consulting and technical support and services for 11% of the net profits.

On October 1, 2009, the Company, through JYNT, revised the Hubei Framework Agreement and the terms of technical service agreement with Hubei SOE. JYNT changed the service charge for providing marketing, strategic consulting and technical support and service from 11% to 6% of the net profits of Hubei Chutian.

F-10

CHINA CABLECOM HOLDINGS, LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1.	Organization and Basis of Preparation of Financial Statements (Continued)

In addition, in accordance with the operating partnership and other agreements (“Framework Agreement”) between JYNT and Hubei SOE, JYNT was given the ability to control certain aspects of the financing and management of Hubei Chutian. JYNT has a veto right regarding the appointment of the general manager of Hubei Chutian, the right to appoint the chief financial officer of Hubei Chutian and an obligation to provide continued financial resources for investment and capital expenditures for the future expansion of the Hubei Chutian’s operations. The result of these rights and obligations given to JYNT is that China Cablecom and JYNT have the ability to substantially influence the joint venture’s daily operations and financial affairs, appoint their senior executives and approve all matters requiring shareholder vote.

The term of this technical services agreement is 30 years. JYNT and Hubei Chutian may mutually seek to extend this agreement upon the expiry of the current term, China Cablecom is not aware of any legal impediments that may affect the renewal of this agreement under current PRC laws. In order for China Cablecom to continue to derive the economic benefits from its joint venture interest in the operation of Binzhou Broadcasting, it must renew these contractual agreements.

Basis of Presentation

The consolidated financial statements, prepared in accordance with U.S. GAAP, include the financial statements of China Cablecom Holdings, Ltd., and its wholly owned or controlled subsidiaries and its consolidated variable interest entities as listed above. A consolidated variable interest entity is a variable interest entity of which the Company is the primary beneficiary under FASB ASC 810-10. All significant inter-company transactions and balances between the Company, its subsidiaries and VIEs are eliminated upon consolidation. The Company has included the results of operations of its subsidiaries and consolidated variable interest entities from the dates of acquisition.

The Company, its subsidiaries and VIEs referenced above are hereinafter collectively referred to as the “Company”.

As of December 31, 2010, the consolidated financial statements include the accounts of the Company and the following entities.

Name of Company	Place of incorporation	Attributable equity interest			Direct/ Indirect controlling interest

China Cablecom Ltd	British Virgin Islands		100	%	Direct

China Cablecom Company Limited	Hong Kong		100	%	Indirect

Heze Cablecom Network Technology Co., Ltd	PRC		100	%	Indirect

Jinan Youxiantong Network Technology Co., Ltd	PRC		*		Indirect

* The Company has indirect controlling interest of Jinan Youxiantong Network Technology Co., Ltd under the contractual arrangement.

F-11

CHINA CABLECOM HOLDINGS, LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1. Organization and Basis of Preparation of Financial Statements (Continued)

Basis of Presentation (Continued)

VIEs are entities that lack one or more voting interest entity characteristics. The Company consolidates VIEs in which it is the primary beneficiary of its economic gains or losses. The FASB has issued FASB ASC 810-10, Consolidation of Variable Interest Entities, regarding certain entities in which equity investors do not have the characteristics of a controlling financial interest or do not have sufficient equity at risk for the entity to finance its activities without additional subordinated financial support from other parties. It separates entities into two groups: (1) those for which voting interests are used to determine consolidation and (2) those for which variable interests are used to determine consolidation. FASB ASC 810-10 clarifies how to identify a variable interest entity and how to determine when a business enterprise should include the assets, liabilities, non-controlling (“minority”) interests and results of activities of a variable interest entity in its consolidated financial statements.

In accordance with FASB ASC 810-10, China Cablecom has evaluated its economic relationships with JYNT and has determined that it is required to consolidate JYNT. Therefore JYNT is considered to be a VIE, as defined by FASB ASC 810-10, of which China Cablecom is the primary beneficiary. China Cablecom, as mentioned above, absorbs a majority of the economic risks and rewards of the VIE that is being consolidated in the accompanying financial statements.

Investment in operating joint ventures

Equity method investments are recorded at original cost and adjusted to recognize the Company's proportionate share of the investee's net income or losses and additional contributions made and distributions received. The Company recognizes a loss if it is determined that other than temporary decline in the value of the investment exists.

2. Summary of Significant Accounting Policies

Cash and Cash Equivalents

Cash and cash equivalents include all cash denominated in US dollars and deposits in banks with reputable financial institutions in the United States.

Deferred Financing Costs

Deferred financing costs related to the Company’s Bridge Financing and Convertible Notes are being fully amortized due to debt restructure during the year ended December 31, 2009. Deferred financing costs related to the Company’s Senior Secured Note are being amortized over the life of the notes payable of 6 years.

Amortization for the years ended December 31, 2010, 2009 and 2008 was $343,272, $636,299 and $1,209,775 respectively. Indirect costs of financing activities are expensed as incurred.

Valuation of Long-lived Assets

The Company periodically evaluates the carrying value of long-lived assets to be held and used when events and circumstances warrant such a review. The carrying value of a long-lived asset is considered impaired when the anticipated undiscounted cash flows from such asset is less than its carrying value. In that event, an impairment loss is recognized based on the amount by which the carrying value exceeds the fair value of the long-lived asset. Fair value is determined primarily using the anticipated cash flows discounted at a rate commensurate with the risk involved. Losses on long-lived assets to be disposed of are determined in a similar manner, except that fair values are reduced for the cost to dispose.

F-12

CHINA CABLECOM HOLDINGS, LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

2. Summary of Significant Accounting Policies (Continued)

Fair value of financial instruments

FASB ASC Topic 820, Fair Value Measurement and Disclosures, defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. This topic also establishes a fair value hierarchy which requires classification based on observable and unobservable inputs when measuring fair value. There are three levels of inputs that may be used to measure fair value:

Level 1

Quoted prices in active markets for identical assets or liabilities.

Level 2

Observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.

Level 3

Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.

The carrying amounts of financial assets and liabilities, such as cash, accounts receivable, prepaid expenses and other current assets, accounts payable, and other current liabilities, approximate their fair values because of the short maturity of these instruments and market rates of interest.

Property, Plant and Equipment

Plant and equipment are stated at cost less accumulated depreciation. Additions and improvements to property and equipment accounts are recorded at cost. Maintenance, repairs, and minor renewals are charged directly to expense as incurred. Major additions and betterments to property and equipment accounts are capitalized. Depreciation is computed using the straight-line method over the estimated useful lives less residual value.

Estimated useful lives of the assets are as follows:

Depreciation of property, plant and equipment is computed using the straight-line method over the following estimated useful lives of the assets: -

	Years
Furniture, fixtures and office equipments	5
Motor vehicles	4-10
Building improvements	20-40

Comprehensive Income

The Company has adopted FASB ASC 220, “Comprehensive Income”. This statement establishes rules for the reporting of comprehensive income and its components. Comprehensive income consists of net income and foreign currency translation adjustments and is presented in the Consolidated Statements of Income and the Consolidated Statements of Equity.

Stock-Based Compensation

The Company awards stock options and other equity-based instruments to its employees and directors (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.

F-13

CHINA CABLECOM HOLDINGS, LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

2. Summary of Significant Accounting Policies (Continued)

Use of Estimates

The preparation of the Company’s financial statements in conformity with accounting principles generally accepted in the U.S. requires management to make estimates and assumptions that affect 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.

The financial statements include some amounts that are based on management’s best estimates and judgments. The most significant estimates relate to useful lives for depreciation and amortization, deferred tax provisions and valuation allowances, purchase price allocations, contingencies. These estimates may be adjusted as more current information becomes available to the Company and any adjustment could be significant to the accompanying financial statements.

The determination of the primary beneficiary of a VIE based on whether the Company has the power to direct the activities that most significant impact the economic performance of the VIE and the obligation to absorb losses or the right to receive benefits of the VIE. It require the Company to make an ongoing assessment of the primary beneficiary of a VIE. The Company may require to deconsolidate certain VIE when there is information indicate that the Company lost the primary beneficiary to a VIE.

Off-balance Sheet Arrangements

The Company does not have any off-balance sheet arrangements as of December 31, 2010, 2009 and 2008.

Debt Restructure

Due to the default in payment of both principal and interest of promissory notes in April 2009, the Company negotiated with the promissory note holders and convertible note holders and completed the debt restructure in October 2009.

In connection with the debt restructure, the Company entered into a waiver agreement with the consent from all the promissory note holders on October 9, 2009. The Company issued $5.5 million in Unsecured Notes due October 8, 2015 bearing a fixed interest rate of 5% per annum along with 15,397,204 shares of Series A Convertible Preferred Shares to the note holders in settlement of their current debt and accrued interest obligations. The debt restructure reduced the overall principal amount of its long-term debt obligations and eliminated cash interest obligations on the new debt securities issued. Under the debt restructure, the difference between carrying amount of the notes payable and the fair value of the equity instruments issued together with the new Notes issued are accounted for as debt extinguishments resulting in a loss of $5,658,140, which was recognized in the Statement of Operations for the year ended December 31, 2009.

In addition, the Company also entered into a waiver agreement with the consent from all the convertible note holders on October 9, 2009. The Company issued $18 million in Secured Notes due October 8, 2016 bearing fixed interest rate of 5% per annum along with 50,402,082 shares of Series A Convertible Preferred Shares to the note holders in settlement of their current debt and accrued interest obligations. The debt restructure reduced the overall principal amount of its long-term debt obligations and eliminated cash interest obligations on the new debt securities issued.

F-14

CHINA CABLECOM HOLDINGS, LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

2. Summary of Significant Accounting Policies (Continued)

Debt Restructure (Continued)

Under the debt restructure, the difference between carrying amount of convertible notes and the fair value of the equity instruments issued together with the new Notes issued are accounted for as debt extinguishments resulting in a loss of $34,005,326, which was recognized in the Statement of Operations for the year ended December 31, 2009.

Each Series A Convertible Preferred Share may be converted, at the option of the share holder, into one ordinary share, which represents approximately 66.2% of the Company's ordinary shares outstanding after the closing of the debt restructuring and a concurrent offering of new senior secured notes described below.

The debt restructure strengthens the Company's balance sheet by reducing the overall principal amount of its long-term debt obligations and eliminating cash interest obligations on the new debt securities issued.

Private Financings

On October 2009, the Company also completed a private placement of $33 Million in aggregate principal amount of 12% Senior Secured Notes (the “New Notes”) due October 2015. The holders of New Notes have been issued 23,158,080 Series B Convertible Preferred Shares. Each Series B Convertible Preferred Share may be converted, at the option of the share holder, into one ordinary share, which representing approximately 23.3% of the Company's total outstanding shares after a concurrent debt-for-equity restructuring of its outstanding debt obligations.

The Net proceeds from the private financing will be used to satisfy the Company's remaining obligations to the Hubei SOE under its supplementary framework agreement.

Basic Income/Loss Per Ordinary Share

The computation of income/loss per share is based on the weighted average number of shares outstanding during the period presented in accordance with FASB ASC 260, “Earnings Per Share”. At December 31, 2010, 2009 and 2008, due to net losses the Company’s share equivalents were anti-dilutive and excluded in the loss per share computations.

Income Taxes

The Company accounts for income taxes under FASB ASC Topic 740 "Income Taxes". Deferred income tax assets and liabilities are determined based upon differences between the financial reporting and tax bases of assets and liabilities and are measured using the enacted tax rates and laws that will be effective when the differences are expected to reverse.

Deferred tax assets are reduced by a valuation allowance to the extent management concludes it is more likely than not that the assets will not be realized. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the statements of income in the period that includes the enactment date.

FASB ASC Topic 740 prescribes a more-likely-than-not threshold for financial statement recognition and measurement of a tax position taken in the tax return. This interpretation also provides guidance on de-recognition of income tax assets and liabilities, classification of current and deferred income tax assets and liabilities, accounting for interest and penalties associated with tax positions, accounting for income taxes in interim periods and income tax disclosures.

F-15

CHINA CABLECOM HOLDINGS, LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

2. Summary of Significant Accounting Policies (Continued)

Foreign Currency Translation

China Cablecom Holdings, Ltd.’s functional currency is the US dollar. The Company’s subsidiaries and VIEs determine their functional currencies based on the criteria of FASB ASC 830 Foreign Currency Translation and have determined their functional currency to be their respective local currency. The Company uses the average exchange rate for the period and the exchange rate at the balance sheet date to translate its operating results and financial position, respectively. Any translation gains (losses) are recorded in accumulated other comprehensive income (loss) as a component of shareholders’ equity. Transactions denominated in foreign currencies are translated into the functional currency at the exchange rates prevailing on the transaction dates. Assets and liabilities denominated in foreign currencies are translated into the functional currency at the exchange rates prevailing at the balance sheet date. Exchange gains and losses are included in the consolidated statements of income.

Translation of amounts from RMB into United States dollars (“US$”) has been made at the following exchange rates for the respective periods:

December 31, 2010
Balance sheet		RMB6.6227 to US$1.00
Statement of operations and comprehensive loss		RMB6.72565 to US$1.00

December 31, 2009
Balance sheet		RMB6.8282 to US$1.00
Statement of operations and comprehensive loss		RMB6.8314 to US$1.00

December 31, 2008
Balance sheet		RMB6.8346 to US$1.00
Statement of operations and comprehensive loss		RMB7.0744 to US$1.00

Revenue recognition

The principal activity of the Company is the joint venture operation of two cable television networks in China: Binzhou Broadcasting and Television Information Network Co., Ltd and Hubei Chutian Video Communication Network Co., Ltd.

The Company recognizes revenue based on the following:

Management fee income – The Company recognizes the management fee income when the right to receive payment is established in accordance with the joint venture agreement.

3.	Restatement

At the beginning, the Company consolidated the financial results of both JVs - Binzhou Broadcasting and Hubei Chutian based on the Framework Agreement which gave the ability of JYNT to control certain aspects of financing and management of both JVs. In accordance with the guidance ASU No. 2009-17, the Company reassesses whether they have the power to direct the activities that most significantly impact the economic performance of the VIEs and the obligation to absorb losses or the right to receive benefits of the VIEs that could potentially be significant to the VIEs. The Company decided that they were not the primary beneficiary of both JVs in view of the power of JYNT over both JVs which were protective in nature and did not have the controlling financial interest in both JVs. As a result, the Company determined to deconsolidate the assets, liabilities and operating results of both JVs that the Company has been consolidated previously. The impact of the adoption shall be applied retrospectively with a cumulative-effect adjustment to retained earnings as of the beginning of the first year restated.

F-16

CHINA CABLECOM HOLDINGS, LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

3. Restatement (Continued)

The following financial statement line items were affected by the change:

Balance sheet as of December 31, 2010, 2009 and 2008:

	2010							2009							2008
	As previously reported		As restated		Effect of change			As previously reported		As restated		Effect of change			As previously reported		As restated		Effect of change
Total assets	$	179,679,667	$	70,384,340	$	(109,295,327	)	$	190,771,170	$	81,317,050	$	(109,454,120	)	$	183,075,509	$	57,773,570	$	(125,301,939	)
Total liabilities	$	156,093,628	$	40,130,937	$	(115,962,691	)	$	152,093,799	$	41,412,403	$	(110,681,396	)	$	151,528,332	$	26,956,331	$	(124,572,001	)
Non-controlling interest	$	8,889,794	$	-	$	(8,889,794	)	$	1,549,726	$	-	$	(1,549,726	)	$	1,804,075	$	-	$	(1,804,075	)
Accumulated deficit	$	100,533,198	$	84,572,062	$	(15,961,136	)	$	73,111,896	$	70,164,375	$	(2,947,521	)	$	16,532,864	$	15,295,384	$	(1,237,480	)
Accumulated other comprehensive income	$	339,722	$	405,036	$	65,314		$	595,396	$	566,459	$	(28,937	)	$	613,064	$	581,222	$	(31,842	)
Total shareholder equity	$	23,586,039	$	30,253,403	$	6,667,364		$	38,677,371	$	39,904,647	$	1,227,276		$	31,547,177	$	30,817,239	$	(729,938	)

Statement of Income for the years ended December 31, 2010, 2009 and 2008:

	2010								2009								2008
	As previously reported		As restated			Effect of change			As previously reported		As restated			Effect of change			As previously reported		As restated		Effect of change
Revenue	$	53,963,140	$	(3,797,435	)	$	(57,760,575	)	$	45,563,281	$	(218,459	)	$	(45,781,740	)	$	23,439,217	$	89,347	$	(23,349,870	)
Loss from operation	$	10,559,405	$	9,248,400		$	(1,311,005	)	$	6,956,609	$	5,184,591		$	(1,772,018	)	$	5,123,259	$	5,182,071	$	58,812
Loss before income tax	$	27,387,866	$	13,431,975		$	(13,955,891	)	$	55,604,114	$	54,638,424		$	(965,690	)	$	12,844,482	$	13,409,834	$	565,352
Net loss	$	27,011,251	$	14,407,687		$	(12,603,564	)	$	56,176,095	$	54,868,991		$	(1,307,104	)	$	13,186,230	$	13,410,551	$	224,321
Net loss attributable to ordinary shareholders	$	27,093,592	$	14,407,687		$	(12,685,905	)	$	56,568,951	$	54,868,991		$	(1,699,960	)	$	14,172,849	$	13,410,551	$	(762,298	)
Loss per ordinary share - Basic and fully diluted	$	3.70	$	1.97		$	(1.73	)	$	16.68	$	16.18		$	(0.5	)	$	5.73	$	5.42	$	(0.31	)

F-17

CHINA CABLECOM HOLDINGS, LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

3. Restatement (Continued)

Statement of Cash Flows for the years ended December 31, 2010, 2009 and 2008:

	2010									2009									2008
	As previously reported			As restated			Effect of change			As previously reported			As restated			Effect of change			As previously reported		As restated			Effect of change
Net loss, net of tax	$	27,011,251		$	14,407,687		$	(12,603,564	)	$	56,176,095		$	54,868,991		$	(1,307,104	)	$	13,186,230	$	13,410,551		$	224,321
Net cash provided by / (used in) operating activities	$	28,738,636		$	29,853		$	(28,708,783	)	$	22,693,930		$	8,354,021		$	(14,339,909	)	$	6,722,563	$	(11,793,586	)	$	(18,516,149	)
Net cash used in investment activities	$	38,782,669		$	6,701,484		$	(32,081,185	)	$	28,460,489		$	27,314,682		$	(1,145,807	)	$	33,727,234	$	35,122,964		$	1,395,730
Net cash provided by financing activities	$	1,428,313		$	286,892		$	(1,141,421	)	$	669,368		$	16,527,795		$	15,858,427		$	42,245,114	$	43,437,612		$	1,192,498
Net (decrease) / increase in cash	$	(9,487,956	)	$	(6,063,469	)	$	3,424,487		$	(5,243,791	)	$	(2,434,411	)	$	2,809,380		$	16,543,677	$	(3,081,238	)	$	(19,624,915	)

Statement of Comprehensive Income for the years ended December 31, 2010, 2009 and 2008:

	2010									2009									2008
	As previously reported			As restated			Effect of change			As previously reported			As restated			Effect of change			As previously reported		As restated		Effect of change
Net loss	$	27,011,251		$	14,407,687		$	(12,603,564	)	$	56,176,095		$	54,868,991		$	(1,307,104	)	$	13,186,230	$	13,410,551	$	224,321
Total comprehensive (loss) / income	$	(683,633	)	$	(161,423	)	$	522,210		$	(29,791	)	$	(14,763	)	$	15,028		$	295,477	$	425,664	$	130,187

F-18

CHINA CABLECOM HOLDINGS, LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

4. Recent Changes in Accounting Standards

We describe below recent pronouncements that have had or may have a significant effect on our financial statements. We do not discuss recent pronouncements that are not anticipated to have an impact on or are unrelated to our financial condition, results of operations, or disclosures.

FASB ASC 810. We adopted FASB ASC 810 on January 1, 2010, which amended the consolidation guidance for variable-interest entities 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. The adoption of this guidance will have a material impact on the consolidated financial position and results of the Company. The Company will be required to deconsolidate certain VIEs that have been consolidated previously. The impact of the adoption may be applied retrospectively with a cumulative-effect adjustment to retained earnings as of the beginning of the first year restated.

5. Going Concern and Management’s Plans

The accompanying financial statements are presented on a going concern basis. At December 31, 2010, the Company had a working capital deficit of approximately $4.5 million. The Company generated a net loss of approximately $14.4 million, $54.8 million and $13.4 million during the years ended December 31, 2010, 2009 and 2008, respectively. These conditions raise 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. The Company's independent registered public accounting firm's report on the financial statements as of and for the year ended December 31, 2010, contained an explanatory paragraph regarding the Company's ability to continue as a going concern.

Management plans to continue its efforts to raise additional funds through debt or equity offerings. In 2011, the Company plans to raise fund through the issuance of promissory note and ordinary share.

6. Stock Based Compensation

In April 2008, the Company adopted the China Cablecom Holdings, Ltd. 2007 Omnibus Securities and Incentive Plan (the “Plan”), which provides for the grant of up to 3,333,333 shares option for the benefit of its directors, officers and employees. The Company granted 1,350,000 share options and 1,460,000 share options on October 9, 2009 and December 20, 2009, respectively, to its directors, officers and employees under the plan. These shares options are exercisable at $2.34 and $1.83 per share, respectively, and may be exercised by the optionee no later than the tenth anniversary of the date of option agreement. As of December 31, 2010, 2,810,000 options have been issued under the plan and 523,333 shares remain available to be issued.

F-19

CHINA CABLECOM HOLDINGS, LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

6. Stock Based Compensation (Continued)

The Company accounts for its stock option awards pursuant to the provisions of FASB ASC 718, “Stock Compensation”. 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 fair value of the total options granted in the year measured as at the date of grant on October 9, 2009 was $2,727,755 and December 20, 2009 was $2,260,874. The following table outlines the variables used to derive the fair value using in the Black-Scholes option-pricing model:

Risk free interest rate		1.3177% - 1.4864	%
Volatility		163.46% - 170.57	%
Dividend yield		-
Expected option life	10 years

Movements in the number of share options outstanding and their related weighted average exercise prices are as follows:

	2010				2009				2008
	Shares		Weighted average exercise price		Shares		Weighted average exercise price		Shares		Weighted average exercise price

Options outstanding at beginning of year		2,810,000	$	2.07		-		-		-		-
Granted		-		-		2,810,000	$	2.07		-	$	-
Options outstanding at end of year		2,810,000	$	2.07		2,810,000	$	2.07		-	$	-

Options exercisable at end of year		2,810,000				2,810,000
Options available for issuance		523,333				523,333

During the years ended December 31, 2010 and 2009, the Company recorded stock based compensation of $1,679,368 and $217,538, respectively, in connection with the issuance of stock options.

F-20

CHINA CABLECOM HOLDINGS, LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

6. Stock Based Compensation (Continued)

As of December 31, 2010 and 2009, the Company had total unrecognized compensation expense related to options granted of $3,091,723 and $4,771,091, respectively which will be recognized over a remaining service period of approximately 3 years.

7. Cash and cash equivalents

Financial instruments that potentially subject the Company to significant concentrations of credit risk consist of cash and cash equivalents and pledged deposits. As of December 31, 2010, 2009 and 2008, majority of the Company’s cash and cash equivalents were held by major banks located in United States, which management believes are high credit quality financial institutions.

8. Prepaid Expenses and Advances

Prepaid expenses and other receivables consist of the following:

	December 31,		December 31,		December 31,
	2010		2009		2008
	(restated)		(restated)		(restated)

Prepaid professional fees	$	-	$	14,645	$	-
Loan advance		2,409,895		4,413,198		6,425,587
Advanced payments		1,236,495		1,647,306		430,438
Total	$	3,646,390	$	6,075,149	$	6,856,025

The loan advance included offshore loan amounting to approximately $1.2 million and bridge financing to third parties amounting to approximately $1 million which was unsecured, interest-free and repayable within a year.

9. Property, Plant and Equipment, Net

Property, plant and equipment, net consist of the following:

	December 31,			December 31,			December 31,
	2010			2009			2008
	(restated)			(restated)			(restated)
At cost:
Furniture, fixtures and office equipment	$	54,540		$	49,955		$	48,809
Motor vehicles		55,235			53,572			53,522
Building improvements		211,259			165,432			146,314

Total		321,034			268,959			248,645

Less: accumulated depreciation		(182,804	)		(109,564	)		(46,585	)
Net book value	$	138,230		$	159,395		$	202,060

There were no impairment provisions made at December 31, 2010, 2009 and 2008. Depreciation expense for the years ended December 31, 2010, 2009 and 2008 were $68,128, $62,934 and $40,871, respectively.

F-21

CHINA CABLECOM HOLDINGS, LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

10. Investment in operating joint ventures

	December 31,			December 31,			December 31,
	2010			2009			2008
Unlisted equity investment, at cost	$	8,138,675		$	3,643,227		$	3,643,227
Loan advance		65,746,777			63,584,385			36,289,772
Share of loss and other comprehensive Income, net of dividend received		(9,858,747	)		(1,124,862	)		111,611

	$	64,026,705		$	66,102,750		$	40,044,610

Loan advances are unsecured, interest free and repayable on demand.

Binzhou Broadcasting and Television Information Network Co., Ltd

On October 1, 2007, the Company through JYNT entered into a joint venture partnership with its partner Binzhou SOE and formed Binzhou Broadcasting and Television Information Network Co., Ltd. (“Binzhou Broadcasting”) and agreed to acquire 49% equity interest in Binzhou Broadcasting. Up to the reporting date, JYNT had only contributed $14 million to Binzhou Broadcasting and there was a further capital contribution of $16 million had been due but not yet settled. Any failure will affect the current economic benefit that China Cablecom shared in Binzhou Broadcasting and subject to the penalty of approximately $755,000 to Binzhou SOE.

The principal activity of Binzhou Broadcasting is provision of cable network services. The Company accounts for the percentage of investment, under the equity method of accounting, based on actual equity contribution made by JYNT at each of the reporting date. For the years ended 2010, 2009 and 2008, the Company was entitled to account for economic benefit shared in Binzhou Broadcasting approximately 27.6%, 27.6% and 26.1% respectively.

Summarized financial information of Binzhou Broadcasting as of December 31, 2010 and 2009 are as follows:

	December 31,			December 31,		December 31,
	2010			2009		2008
Current assets	$	6,857,696		$	10,898,559	$	7,552,474
Non-current assets		23,296,427			35,969,589		37,119,844

Total assets	$	30,154,123		$	46,868,148	$	44,672,318

Current liabilities	$	8,667,530		$	14,999,170	$	12,167,178
Non-current liabilities		32,445,981			31,469,494		30,708,454
Shareholders' equity		(10,959,388	)		399,484		1,796,686

Total liabilities and shareholders' equity	$	30,154,123		$	46,868,148	$	44,672,318

Summarized financial information of Binzhou Broadcasting is as follows for the years ended December 31, 2010, 2009 and 2008:

	For the year ended			For the year ended			For the year ended
	December 31,			December 31,			December 31,
	2010			2009			2008
Net sales	$	11,531,348		$	10,659,255		$	9,119,401
Gross profit		1,797,134			4,439,962			4,373,538
(Loss) / Income before taxes		(11,350,894	)		(438,850	)		833,188
Net (loss) / income		(11,459,687	)		(606,310	)		590,135

Company's share of net (loss) / income		(3,167,830	)		(167,604	)		154,257

F-22

CHINA CABLECOM HOLDINGS, LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

10. Investment in operating joint ventures (Continued)

Hubei Chutian Video Communication Network Co., Ltd

On June 16, 2008, the Company through JYNT entered into a joint venture partnership with its partner Hubei SOE and formed Hubei Chutian Video Communication Network Co., Ltd. (‘Hubei Chutian”) and agreed to acquire 49% equity interest in Hubei Chutian.

The principal activity of Hubei Chutian is provision of cable network services. The Company accounts for the percentage of investment, under the equity method of accounting, based on actual equity contribution made by JYNT at each of the reporting date. For the years ended 2010, 2009 and 2008, the Company was entitled to account for economic benefit shared in Hubei Chutian approximately 49%, 49% and 23.5% respectively.

Summarized financial information of Hubei Chutian as of December 31, 2010, 2009 and 2008 are as follows:

	December 31,		December 31,		December 31,
	2010		2009		2008
Current assets	$	27,036,924	$	27,935,512	$	19,956,280
Non-current assets		123,057,934		111,486,716		100,717,952

Total assets	$	150,094,858	$	139,422,228	$	120,674,232

Current liabilities	$	56,980,813	$	42,467,440	$	60,637,471
Non-current liabilities		91,944,551		96,459,328		57,359,038
Shareholders' equity		1,169,494		495,460		2,677,723

Total liabilities and shareholders' equity	$	150,094,858	$	139,422,228	$	120,674,232

Summarized financial information of Hubei Chutian is as follows for the years ended December 31, 2010 and 2009 and six months ended December 31, 2008:

	For the year ended			For the year ended			For the six months ended
	December 31,			December 31,			December 31,
	2010			2009			2008
Net sales	$	42,431,792		$	34,904,026		$	14,319,816
Gross profit		12,151,561			11,256,097			5,628,720
Loss before taxes		10,852,867			1,749,897			178,490
Net loss		10,367,435			2,153,983			276,468

Company's share of net loss		(5,080,043	)		(1,055,451	)		(64,910	)

11. Income Taxes

The entities within the Company file separate tax returns in the respective tax jurisdictions that they operate.

British Virgin Islands

The Company, being incorporated in the British Virgin Islands as an exempted company, is not subject to any income tax in the British Virgin Islands.

F-23

CHINA CABLECOM HOLDINGS, LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

11. Income Taxes (Continued)

Hong Kong

China Cablecom Company Limited is generally subject to Hong Kong income tax on its taxable income derived from trade or businesses carried out in Hong Kong at 16.5% for the years ended December 31, 2010, 2009 and 2008. However, as the Company has not generated any revenue or income, no provision for Hong Kong income tax has been made.

The PRC

The VIEs being established in the PRC was subject to the PRC Enterprise Income Tax (“EIT”) at 33% prior to January 1, 2008. In March 2007, the PRC government enacted the PRC Enterprise Income Tax Law, or the New EIT Law, and promulgated related regulation, Implementing Regulations for the PRC Enterprise Income Tax Law, which became effective from January 1, 2008. The PRC Enterprise Income Tax Law, among other things, imposes a unified income tax rate of 25% for both domestic and foreign invested enterprises registered in the PRC.

The amount of income tax charged to the consolidated statement of comprehensive income represents:

	For the year ended December 31, 2010		For the year ended December 31, 2009		For the year ended December 31, 2008
	(restated)		(restated)		(restated)
PRC
- current income tax	$	975,712	$	230,567	$	717
- deferred income tax		-		-		-

Total	$	975,712	$	230,567	$	717

A reconciliation of the expected income tax expense to the actual income tax expense is as follows:

	For the year ended December 31, 2010			For the year ended December 31, 2009			For the year ended December 31, 2008
	(restated)			(restated)			(restated)

Loss before income taxes	$	(13,431,975	)	$	(54,638,424	)	$	(13,409,834	)

Tax calculated at the domestic tax rate of 25%		(3,357,994	)		(13,659,606	)		(3,352,458	)
Tax effect of expenses not deductible for tax purposes		2,271,844			13,586,330			3,418,080
Tax effect of share of profit and loss of operating joint ventures		2,061,968			305,764			(22,337	)
Tax effect of non-taxable income		(106	)		(1,921	)		(42,568	)

Income tax expense	$	975,712		$	230,567		$	717

As of December 31, 2010, 2009 and 2008, the Company did not have any significant temporary differences and carry forwards that may result in deferred tax. The Company has analyzed the tax positions taken or expected to be taken in its tax filings and has concluded it has no material liability related to uncertain tax positions or unrecognized tax benefits. The Company classifies interest and/or penalties related to income tax matters in income tax expense. For the years ended December 31, 2010, 2009 and 2008, the Company has not recognized any amount of interest and penalties related to uncertain tax positions. The Company does not anticipate any significant increases or decreases to its liability for unrecognized tax benefits within the next 12 months.

F-24

CHINA CABLECOM HOLDINGS, LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

11. Income Taxes (Continued)

The New EIT Law also imposes a withholding tax of 10% unless reduced by a tax treaty, for dividends distributed by a PRC-resident enterprise to its immediate holding company outside the PRC for earnings accumulated beginning on January 1, 2008 and undistributed earnings generated prior to January 1, 2008 are exempt from such withholding tax. The Company has not provided for income taxes on accumulated earnings of its PRC subsidiary as of December 31, 2010, 2009 and 2008 because these earnings are intended to be reinvested indefinitely in the overseas jurisdictions. It is not practicable to estimate the amount of additional taxes that might be payable on such undistributed earnings.

According to the PRC Tax Administration and Collection Law, the statute of limitations is three years if the underpayment of taxes is due to computational or other errors made by the taxpayer or the withholding agent. The statute of limitations extends to five years under special circumstances. In the case of transfer pricing issues, the statute of limitations is ten years. There is no statute of limitations in the case of tax evasion.

12. Other Current Liabilities

Other current liabilities consist of the following:

	December 31,		December 31,		December 31,
	2010		2009		2008
	(restated)		(restated)		(restated)

Other payable	$	28,980	$	7,700	$	9,528
Accrued expenses		385,990		-		779,919
Accrued salaries and welfare		194,600		89		871
Provision for taxation - PRC		1,228,211		230,241		29
Accrued interest		231,685		270,411		-

Total	$	2,069,466	$	508,441	$	790,347

13. Promissory note, net of discount

In September 2007, China Cablecom Ltd. issued an aggregate of $19.99 million in promissory notes and 766,680 shares of Class A preferred stock to 10 investors in exchange for proceeds of approximately $20 million (the “Bridge Financing”). Each share of Class A preferred stock was converted into one share of the Company’s ordinary shares in April 2008. The proceeds from the Bridge Financing were used to fund the acquisition price of Binzhou Broadcasting (Note 4) and for working capital purposes. The promissory notes bear interest at a stated interest rate of 10% and are collateralized by a pledge of approximately 650,000 ordinary shares of the Company, held by the Company’s Chairman. The Company allocated the proceeds based on the relative fair value of the promissory notes and the Class A preferred stock, the resulting discount on the promissory notes is being amortized using the effective interest method to interest expense over the term of the promissory notes. For the year ended December 31, 2008 approximately $2,383,000 was amortized and charged to interest expense. In addition, the interest expense on these promissory notes approximated $1,359,000 for the year ended December 31, 2008, resulting in total interest expense of approximately $3,742,000. Upon the merger between China Cablecom Ltd. and Jaguar, 50% of the promissory notes plus accrued interest was repaid in April 2008. The remaining balance of the promissory notes plus accrued interest was due in April 2009.

F-25

CHINA CABLECOM HOLDINGS, LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

13. Promissory note, net of discount (Continued)

Due to the default in payment of the principal and interest of promissory notes due in April 2009, the Company negotiated with the note holders and completed the debt restructure in October 2009. The Company issued $5.5 million Unsecured Notes due October 8, 2015 bearing a fixed interest rate of 5% per annum along with 15,397,204 shares of Series A Convertible Preferred Shares to the note holders in settlement of approximately $11 million in current debt and accrued interest obligations. The debt restructure reduce the overall principal amount of its long-term debt obligations and eliminate cash interest obligations on the new debt securities issued.

14. Convertible notes

On May 9, 2008, China Cablecom Holdings, Ltd. issued convertible notes with a principal (“face”) value of $43,175,000, along with 1,524,994 shares of ordinary shares (labeled “incentive shares” in the agreement) to several investors. The gross proceeds of this transaction were $30,000,000 (“purchase price”), consisting of $25,793,283 cash and $4,206,717 from the cancellation of the principal amount and accrued interest of promissory notes issued by China Cablecom Ltd. in September 2007.

Interest on the convertible notes is due at maturity at 9.99% per annum. The interest through maturity has been prepaid and is equal to the difference between the face value of the convertible notes and the gross proceeds. In substance, the note is a zero coupon note (except for the shares to be issued as described in the next paragraph) with a maturity value of $43,175,000 issued for $30,000,000 with a $13,175,000 discount. The convertible notes mature on May 9, 2011 at which point the face value of the notes are due. The notes are convertible, at the holders’ option, into the Company’s ordinary shares, which have a par value of $0.0005 per share, at a per share conversion price of $9.5.

If there is a principal amount outstanding on the tenth business day following the first anniversary of the closing date of the convertible notes, the Company will issue to the holders of the convertible notes additional incentive shares of up to 124,994 shares, in proportion to the initial principal amount. An additional pro-rata portion of up to 299,997 incentive shares will be issued by the Company to the holders if a principal amount remains outstanding on the tenth business day following the second anniversary of the closing date.

Through May 9, 2009, the Company has the right, subject to certain conditions, to redeem the convertible notes for 78.75% of the outstanding principal amount being redeemed. After May 9, 2009, the Company can redeem the convertible notes for 100% of the purchase price being redeemed and imputed interest on the purchase price being redeemed.

In total, $9,683,712 of the $30,000,000 gross proceeds was allocated to the incentive shares and added to the discount on the convertible notes that had been created by the prepaid interest, resulting in $20,316,288 as the net balance originally recorded for the convertible notes.

F-26

CHINA CABLECOM HOLDINGS, LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

14. Convertible notes (Continued)

The convertible feature creates an intrinsic value as a result of the fair value of the ordinary shares from the assumed conversion of the notes being greater than the allocated value of the convertible notes as of the issuance date. Such feature is normally characterized as a “beneficial conversion feature” (“BCF”). Pursuant to Emerging Issues Task Force (“EITF”) Issue No. 98-5, “Accounting for Convertible Securities with Beneficial Conversion Features or Contingently Adjustable Conversion Ratio” and EITF No. 00-27, “Application of EITF Issue No. 98-5 to Certain Convertible Instruments”, the intrinsic value of the embedded BCF of $8,542,791 is recorded as additional debt discount from the face amount of the convertible notes on May 9, 2008, increasing the total discount on the debt to $31,401,503 for a net $11,773,497 payable recorded for the convertible notes. In the period May 9, 2008 to December 31, 2008, $4,910,547 of the discount was amortized to interest expense on the effective interest method, resulting in a remaining discount of $26,490,956 and net convertible notes principal of $16,684,044. The amortization is calculated on the assumption that the additional shares will be issued at the May 9,

2008 per share value. Amortization will be adjusted prospectively if the actual values on the issuance dates differ from the May 9, 2008 per share value and the actual number of shares issue is different.

As part of the transaction, cash of 7% of the cash portion of the purchase price was paid as broker’s fee and $150,000 paid as due diligence fee. In addition, on the first and second anniversaries of the closing date, up to $150,000 and $200,000 will be paid as an additional due diligence fee and will be recorded as deferred financing cost when the fee is due. The amount of the due diligence fee payable in connection with the first and second anniversaries of the closing date, will be paid in the same proportion as the amount of principal amount outstanding on each such anniversary date compared to the original principal amount. Issuance costs totalled $1,868,960, of which $603,282 was allocated to the incentive shares and recorded as a reduction of paid-in capital. $1,265,678 was recorded as deferred financing costs and is being amortized over the three-year term of the convertible notes using the effective interest method. The amortization is calculated on the assumption that the additional due diligence fees will be paid on the first and second anniversaries. In the period May 9, 2008 to December 31, 2008, amortization expense was $232,663, resulting in unamortized deferred financing costs of $1,033,015 as of December 31, 2008.

The Company negotiated with the note holders and completed the debt restructure in October 2009. The Company issued $18 million Secured Notes due October 8, 2016 bearing fixed interest rate of 5% per annum along with 50,402,082 shares of Series A Convertible Preferred Shares to the note holders in settlement of approximately $23 million in current debt obligations. The debt restructure reduced the overall principal amount of its long-term debt obligations and eliminated cash interest obligations on the new debt securities issued.

15. Amount due to Hubei Chutian

The amount due to Hubei Chutian was unsecured, interest-free and repayable on demand.

16. Unsecured notes

	December 31,			December 31,			December 31,
	2010			2009			2008

Unsecured note issued	$	5,134,795		$	5,500,000		$	-
Less:
Principal reduction		(916,667	)		(365,205	)		-

Long-term portion	$	4,218,128		$	5,134,795		$	-

F-27

CHINA CABLECOM HOLDINGS, LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

16. Unsecured notes (Continued)

On October 9, 2009, under the debt restructure, the Company issued $5.5 million Unsecured Notes due October 8, 2015 bearing fixed interest rate of 5% per annum and 15,397,204 Series A Convertible Preferred Shares to promissory note holders. Each Series A Convertible Preferred Shares can be convertible, at the option of the holder, into one ordinary share. The repayment was scheduled in 8 instalments to be paid every 6 months starting from October 15, 2012.

Until fourteen months after the issue date, principal on the new notes is subject to the cancellation in the event that the Company's ordinary shares close at a daily volume weighted average price greater than $0.85 for 30 consecutive days with daily dollar value of the trading volume of $500,000 or more. All of the shares issuable upon conversion of the Series A Preferred Shares could have been sold by the note holder according to the terms of the notes and permitted to sell during such 30 consecutive trading days, then the principal amount of the note will be deemed satisfied and paid in full. Interest accrued on this note shall be payable on the immediately following interest due date. The principal on the new notes is also subject to the reduction in the event that the note holders convert the Series A Convertible Preferred Shares into ordinary shares within 14 months after the issued date.

During the years ended December 31, 2010 and 2009, there were 2,566,201 and 1,022,389 Series A Convertible Preferred Shares converted into ordinary shares, resulting in the reduction of $916,667 and $365,205 in principal amount of the Unsecured notes and an increase in ordinary shares and additional paid-in capital. The interest expense for the years ended December 31, 2010 and 2009, totally $36,120 and $63,288 were included in accrued expenses.

17. Secured notes

Secured notes, net of discount consists of the following:

	December 31,			December 31,			December 31,
	2010			2009			2008

Secured note issued	$	17,062,563		$	18,000,000		$	-

Less:
Principal reduction		(903,528	)		(937,437	)		-

Long-term portion	$	16,159,035		$	17,062,563		$	-

On October 9, 2009, under the debt restructure, the Company issued $18 million Secured Notes due October 8, 2016 bearing fixed interest rate of 5% per annum and 50,402,082 Series A Convertible Preferred Shares to convertible note holders. Each Series A Convertible Preferred Shares may be converted, at the option of the holder, into one ordinary share. The repayment was scheduled in 7 instalments to be paid every 6 months starting from October 15, 2012.

F-28

CHINA CABLECOM HOLDINGS, LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

17. Secured notes (Continued)

During the years ended December 31, 2010 and 2009, there were 3,979,984 and 2,624,931 Series A Convertible Preferred Shares converted into Ordinary Shares, resulting in the reduction of $903,528 and $937,437 in principal amount of the Secured notes and an increase in ordinary shares and additional paid-in capital. The interest expense for the years ended December 31, 2010 and 2009, totally $138,371 and $207,123 were included in accrued expenses.

18. Senior secured notes

On October 9, 2009, the Company completed a private placement of $33 million Senior Secured Notes (“New Notes”) due October 8, 2015 bearing fixed interest rate of 12% per annum combined with 23,158,080 shares of Series B Convertible Preferred Shares to the holders of New Notes. Each share of Series B Convertible Preferred Shares is convertible into one share of the Company’s ordinary shares. The repayment was scheduled in 6 instalments to be paid every 6 months starting from October 15, 2012. The net proceeds from the issuance will be used to satisfy the Company’s remaining obligations to the Hubei SOE under its supplementary framework agreement.

On the same date, the Company immediately redeemed $13,860,000 of the New Notes due October 2015 reducing the aggregate principal amount of the New Notes outstanding from $33,000,000 to $19,140,000. The value of $11,673,530 was allocated to Series B Convertible Preferred Shares using the relative fair value method and the balance of $7,466,470 was recognized as the value of New Notes.

According to the New Notes agreement, the early redemption of principal prior to the third anniversary of the issue date, the interest otherwise payable on a regularly scheduled payment date prior to the 36 month anniversary of the issue date will be deferred (“Deferred Interest”) and accrue and be payable commencing with the payment date that coincides with the third anniversary of the issue date in equal instalments over the remaining regularly scheduled payment dates. Payments of principal amount will resume on the payment date set forth on the amortization schedule of the New Notes. The collaterals of senior secured notes include all owned and acquired right, title and interest of the Company.

Issuance cost totaled $3,197,205, of which $1,130,990 was allocated to the issuance cost of preferred shares and recorded as a reduction to additional paid-in capital and $2,066,215 was recorded as deferred financing costs and is being amortized over the six-year term of the Senior Secured Note.

For the years ended December 31, 2010 and 2009, $2,660,815 and $506,625 were charged to interest expense using the effective interest rate and $343,272 and $79,000 was amortized to finance costs.

F-29

CHINA CABLECOM HOLDINGS, LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

19. Stockholders’ Equity

On the completion of Jaguar’s redomestication merger with the Company and the concurrent business combination merger with China Cablecom Holdings, Ltd. in April 2008, the Company issued 2,066,680 ordinary shares and 5,716,357 ordinary shares, par value $.0005, to the previous shareholders of China Cablecom Holdings, Ltd. and Jaguar, respectively.

In May 2008, the Company issued 1,524,994 ordinary shares as the incentive shares to the convertible notes subscribers (Note 17).

In July 2008, the Company issued 320,000 ordinary shares, to an entity owned by the Company’s executive chairman, as the fee to the finder of Hubei project.

In October 2008, certain warrants holders exercised 49,100 shares with total proceeds of $245,500.

Pursuant to the debt restructure in October 2009, the Company issued 15,397,204 and 50,402,082 Series A Convertible Preferred Shares, par value $.0005, to the previous Promissory notes holders and Convertible note holders, respectively.

The Company also issued 23,158,080 Series B Convertible Preferred Shares, par value $.0005, as the incentive shares to the New Notes subscribers. As part of the transaction, 250,000 ordinary shares were issued to the Broker for its fees.

Holders of ordinary shares, Series A Convertible Preferred Shares and Series B Convertible Preferred Shares have equal rights on any dividend to be paid by the Company. However, the holders of Series A Convertible Preferred Shares and Series B Convertible Preferred Shares have no right to vote at a meeting of the members of the Company or on any resolution of the members of the Company.

In the event of the liquidation, winding up or dissolution of the Company, holders of Series B Preferred Shares have the preference rights, over the holders of Series A Preferred Shares and ordinary shares, of distribution of the surplus assets, in the amount up to an aggregate amount equal to the number of issued and outstanding Series B Preferred Shares multiplied by the closing price of the ordinary shares on the Nasdaq Capital Market on 7 October, 2009.

The holders of Series A Convertible Preferred Shares and Series B Convertible Preferred Shares have rights to convert one Preferred Shares to one ordinary share at any time.

For the years ended December 31, 2010 and 2009, 6,546,185 and 3,637,320 Series A Preferred Shares and 8,333,397 and nil Series B Preferred Shares had been converted into Ordinary Shares, respectively.

F-30

CHINA CABLECOM HOLDINGS, LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

20. Warrants

The Company issued warrants to investors and service providers to purchase ordinary share of the Company. The following table outlines the warrants outstanding as of December 31, 2010, 2009 and 2008:

Name	Number of Warrants Issued		Exercise Price		Expiration Date

Warrants		9,384,234	$	5.00	4/4/2010
Warrants		700,000	$	9.10	5/4/2011
Warrants		2,115,385	$	0.858	8/10/2014
		12,199,619

21. Onshore and offshore loan agreements with Rich Dynamic Limited

The Company advanced $38,000,000 to Rich Dynamic Limited, a Hong Kong company (“RDL”) in 2008, according to two loan agreements dated on June 10, 2008 and July 29, 2008 (“Offshore Loan Agreements”), whereby China Cablecom agreed to extend loans to RDL. These loans were utilized by RDL as payment to a shareholder of Chengdu Chuanghong Jinsha Real Estate Co., Ltd. (“Chengdu Chuanghong”), for the purpose of acquiring 60% of the equity interest in Chengdu Chuanghong. RDL’s loan repayment obligations under the Offshore Loan Agreements were secured under share pledge agreements, in which RDL agreed to pledge its equity interest in Chengdu Chuanghong to China Cablecom as security for RDL’s performance of its loans repayment obligations under the Offshore Loan Agreements.

The shareholder of RDL and JYNT entered into two loan agreements dated on June 10, 2008 and July 29, 2008 (“Onshore Loan Agreements“), whereby the shareholder of RDL agreed to extend two loans to JYNT which amount in aggregate to approximately $38 million (Rmb254,600,000). By the end of December 31, 2010, the Company received repayment of approximately $36.8 million (Rmb244,000,000) from the shareholder of RDL.

The unsettled offshore loan balance amounting to approximately $1.2 million is included in the prepaid expenses and advances as at December 31, 2010 (2009: approximately $2.3 million and 2008: approximately $5.2 million).

22. Commitments and Contingencies

Certain conditions may exist as of the date the financial statements are issued, which may result in a loss to the Company, but which will only be resolved when one or more future events occur or fail to occur. The Company’s management and its legal counsel assess such contingent liabilities, and such assessment inherently involves an exercise of judgment. In assessing loss contingencies related to legal proceedings that are pending against the Company, or unasserted claims that may result in such proceedings, the Company’s legal counsel evaluates the perceived merits of any legal proceedings or unasserted claims as well as the perceived merits of the amount of relief sought or expected to be sought therein.

If the assessment of a contingency indicates that it is probable that a material loss has been incurred and the amount of the liability can be estimated, the estimated liability would be accrued in the Company’s consolidated financial statements. If the assessment indicates that a potentially material loss contingency is not probable but is reasonably possible, or is probable but cannot be estimated, the nature of the contingent liability, together with an estimate of the range of possible loss if determinable and material, would be disclosed.

F-31

CHINA CABLECOM HOLDINGS, LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

23. Operating Risk

Company’s investments are substantially in foreign countries

All of the Company equity investments are operating in the PRC. Such investments are subject to various political, economic, and other risks and uncertainties inherent in the PRC. Among other risks, the Company’s investments are subject to the risks of restrictions on transfer of funds; changing taxation policies; foreign exchange restrictions; and political conditions and governmental regulations.

Foreign exchange risk

Substantially all of the Company’s businesses are transacted in RMB, which is not freely convertible into foreign currencies. On January 1, 1994, the PRC government abolished the dual rate system and introduced a single rate of exchange as quoted daily by the People’s Bank of China. However, the unification of the exchange rates does not imply the convertibility of RMB into US$ or other foreign currencies. All foreign exchange transactions continue to take place either through the People’s Bank of China or other banks authorized to buy and sell foreign currencies at the exchange rates quoted by the People’s Bank of China. Approval of foreign currency payments by the People’s Bank of China or other institutions requires submitting a payment application form together with suppliers’ invoices, shipping documents and signed contracts.

Restrictions on transfer of assets out of the PRC

Dividend payments by the Company are limited by certain statutory regulations in the PRC. The Company shall not pay any dividend without receiving first prior approval from the Foreign Currency Exchange Management Bureau. Dividend payments are restricted to 85% of profits, after tax.

Consolidation of Variable Interest Entities (VIE)

The consolidation of JYNT is based on the assumption that China Cablecom is the primary beneficiary of the VIE and can exercise the power to direct the activities that most significant impact the economic performance of the VIE and the obligation to absorb losses or the right to receive benefits of the VIE. Any failure to obtain the control will cause China Cablecom lost the economic benefit in the VIE and may require to deconsolidate the VIE that the Company currently consolidated. The impact will be applied retrospectively with a cumulative-effect adjustment to retained earnings as of the beginning of first year restated, or through a cumulative-effect adjustment on the date of applied.

24. Subsequent Event

In April and July, 2011, the Company issued promissory note of $27,500 and $389,652, respectively to Platinum Partners Value Arbitrage Fund LP to raise fund for financing the operations of the Company. Mark Nordlicht, a member of our board of directors, is the Chief Executive Officer of Platinum Partners Value Arbitrage Fund LP.

In addition, on April 28, 2011, the Company issued 351,852 ordinary shares at a consideration of $94,500 to Platinum Partners Value Arbitrage Fund LP to raise fund for financing the operations of the Company. Mark Nordlicht, a member of our board of directors, is the Chief Executive Officer of Platinum Partners Value Arbitrage Fund LP.

The Company expects that upon the voluntary delisting of its ordinary shares from the NASDAQ Capital Market. Such shares will commence quotation on the OTC Bulletin Board (OCTBB). The Form 25 was filed on July 28, 2011.

F-32

CHINA CABLECOM HOLDINGS, LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

24. Subsequent Event (Continued)

On August 17, 2011, the Company appointed Mr. David Kratochvil as one of the Board of Directors and audit committee member. It also announced the resignation of Mr Richard Eu, Mr. Shan Li and Mr. Emmanuel Olympitis.

On October 24, 2011, the Company received an offer from the joint venture partner Hubei Chutian Radio & Television Information Network Co., Ltd. to buy back the Company’s investments in Hubei JV. The Board of Directors is currently reviewing the terms of offer.

F-33

HUBEI CHUTIAN VIDEO COMMUNICATION NETWORK CO., LTD.

INDEX TO FINANCIAL STATEMENTS

	Page

Report of Independent Registered Public Accounting Firm	S-1
Balance Sheets	S-2
Statements of Operations	S-3
Statements of Comprehensive Loss	S-4
Statements of Changes in Stockholders’ Equity	S-5
Statements of Cash Flows	S-6
Notes to Financial Statements	S-7

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Owners

Hubei Chutian Video Communication Network Co., Ltd.

We have audited the accompanying balance sheets of Hubei Chutian Video Communication Network Co., Ltd. (the “Company”) as of December 31, 2010 and 2009, and the related statements of operations, comprehensive loss, changes in owners’ equity and cash flows for each of the two years in the period ended December 31, 2010. 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.

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Hubei Chutian Video Communication Network Co., Ltd. as of December 31, 2010 and 2009, and the results of their operations and their cash flows for each of the two years in the period ended December 31, 2010, in conformity with accounting principles generally accepted in the United States of America.

The accompanying financial statements have been prepared assuming the Company will continue as a going concern. As discussed in Note 4 to the financial statements, the Company has incurred significant losses during 2010 and 2009, and has relied on owners’ loan to fund their operations. These conditions raise substantial doubt about the Company’s ability to continue as a going concern. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

/s/ UHY Vocation HK CPA Limited

UHY Vocation HK CPA Limited

Certified Public Accountants

Hong Kong, October 31, 2011

(THE PEOPLE'S REPUBLIC OF CHINA)

S-1

HUBEI CHUTIAN VIDEO COMMUNICATION NETWORK CO., LTD.

BALANCE SHEETS

	December 31, 2010			December 31, 2009
ASSETS
Current Assets:
Cash and cash equivalents	$	9,451,600		$	9,255,047
Accounts receivable		3,183,474			1,588,791
Prepaid expenses and advances		3,280,994			2,422,896
Inventories		4,070,459			3,935,270
Amount due from JYNT		7,050,397			10,733,508
Total Current Assets		27,036,924			27,935,512

Property, plant & equipment, net		83,179,431			68,635,470
Land use rights, net		320,134			166,613
Construction in progress		6,276,049			3,733,036
Intangible assets, net		14,006,759			19,676,036
Goodwill		19,275,561			19,275,561
Total Assets	$	150,094,858		$	139,422,228
LIABILITIES AND OWNERS’ EQUITY
Current Liabilities:
Accounts payable	$	15,603,054		$	11,032,220
Amount due to Hubei SOE		26,786,603			20,967,967
Service performance obligation		5,712,207			3,039,815
Other current liabilities		8,878,949			7,427,438
Total Current Liabilities		56,980,813			42,467,440
Long Term Liabilities:
Loan from owners		91,944,551			96,459,328
Total Liabilities		148,925,364			138,926,768

COMMITMENTS AND CONTINGENCIES		-			-

OWNERS' EQUITY
Registered capital		15,005,484			2,940,918
Accumulated deficit		(12,797,886	)		(2,430,451	)
Accumulated other comprehensive income		(1,038,104	)		(15,007	)
Total owners’ equity		1,169,494			495,460
Total liabilities and owners’ equity	$	150,094,858		$	139,422,228

See accompanying notes to financial statements

S-2

HUBEI CHUTIAN VIDEO COMMUNICATION NETWORK CO., LTD.

STATEMENTS OF OPERATIONS

	For the year ended			For the year ended
	December 31, 2010			December 31, 2009

Revenue	$	42,431,792		$	34,904,026
Cost of revenue		30,280,231			23,647,929
Gross profit		12,151,561			11,256,097
Operating expenses
Impairment of intangible assets		4,359,571			-
Amortization expenses		1,309,706			1,309,706
General and administrative expenses		17,711,532			12,399,135
Total operating expenses		23,380,809			13,708,841
Loss from operations		(11,229,248	)		(2,452,744	)

Other income / (expenses)
Interest income		561,047			179,150
Interest expense		(693,369	)		(248,093	)
Other income		629,609			903,475
Other expenses		(120,906	)		(131,685	)
Total other income		376,381			702,847
Loss before income taxes		(10,852,867	)		(1,749,897	)
Income taxes credit/(expenses)		485,432			(404,086	)
Net loss	$	(10,367,435	)	$	(2,153,983	)

See accompanying notes to financial statements

S-3

HUBEI CHUTIAN VIDEO COMMUNICATION NETWORK CO., LTD.

STATEMENTS OF COMPREHENSIVE LOSS

	For the year ended			For the year ended
	December 31, 2010			December 31, 2009

Net loss	$	(10,367,435	)	$	(2,153,983	)
Other comprehensive loss, net of tax:
Foreign currency translation adjustment		(1,023,097	)		(28,280	)
Total other comprehensive loss, net of tax		(1,023,097	)		(28,280	)

Comprehensive loss	$	(11,390,532	)	$	(2,182,263	)

See accompanying notes to financial statements

S-4

HUBEI CHUTIAN VIDEO COMMUNICATION NETWORK CO., LTD.

STATEMENTS OF CHANGES IN OWNERS’ EQUITY

For the years ended December 31, 2010 and 2009

						Accumulated
	Registered		Accumulated			Other Comprehensive			Total Shareholders’
	Capital		Deficit			Income			Equity

Balance as December 31, 2008	$	2,940,918	$	(276,468	)	$	13,273		$	2,677,723
Net loss for 2009		-		(2,153,983	)		-			(2,153,983	)
Cumulative translation adjustment		-		-			(28,280	)		(28,973	)
Balance as December 31, 2009	$	2,940,918	$	(2,430,451	)	$	(15,007	)	$	495,460

Injection in registered capital		12,064,566		-			-			12,064,566
Net loss for 2010		-		(10,367,435	)		-			(10,367,435	)
Cumulative translation adjustment		-		-			(1,023,097	)		(1,023,097	)
Balance as December 31, 2010	$	15,005,484	$	(12,797,886	)	$	(1,038,104	)	$	1,169,494

See accompanying notes to financial statements

S-5

HUBEI CHUTIAN VIDEO COMMUNICATION NETWORK CO., LTD.

STATEMENTS OF CASH FLOWS

	For the year ended			For the year ended
	December 31, 2010			December 31, 2009
Cash Flows From Operating Activities:
Net loss	$	(10,367,435	)	$	(2,153,983	)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation		15,426,966			10,920,381
Amortization		7,247			5,845
Written off of property, plant and equipment		(725	)		39,829
Impairment loss on intangible assets		4,359,571			-
Amortization of intangible assets		1,309,706			1,309,706
Accounts receivable		(1,594,683	)		38,496
Inventories		(135,188	)		(1,933,132	)
Prepaid expenses and advances		(858,098	)		(366,289	)
Accounts payable		4,570,834			5,248,649
Amount due from JYNT		3,683,110			(10,733,508	)
Amount due to Hubei SOE		5,818,636			(25,848,532	)
Service performance obligation		2,672,392			1,385,936
Other current liabilities		1,451,511			1,043,916
Net cash provided by/(used in) operating activities		26,343,844			(21,042,686	)

Cash Flows From Investing Activities:
Purchase of property, plant and equipment		(27,982,448	)		(20,264,791	)
Additions of construction in progress		(2,543,013	)		(2,751,078	)
Sales proceeds of property, plant and equipment		87,045			23,725
Net cash used in investing activities		(30,438,416	)		(22,992,144	)

Cash Flows From Financing Activities:
Loan advance from owners		(4,514,777	)		39,100,290
Increase in registered capital		12,064,566			-
Net cash provided by financing activities		7,549,789			39,100,290
Effect of exchange rate changes on cash		(3,258,664	)		(80,661	)
Net increase /(decrease) in cash		196,553			(5,015,201	)
Cash and cash equivalents at beginning of period		9,255,047			14,270,248
Cash and cash equivalents at end of period	$	9,451,600		$	9,255,047

Supplemental cash flow information:
Interest paid	$	757,965		$	48,070
Income taxes paid	$	207		$	-

See accompanying notes to financial statements

S-6

HUBEI CHUTIAN VIDEO COMMUNICATION NETWORK CO., LTD.

NOTES TO FINANCIAL STATEMENTS

1.	Organization and Basis of Preparation of Financial Statements

Hubei Chutian Video Communication Network Co., Ltd. ("The Company") was incorporated in Hubei Province on May 15, 2008. The Company was owned by Hubei Chutian Radio and Television Information Network Co., Ltd. (“Hubei SOE”) and Jinan Youxiantong Network Technology Co., Ltd. (“JYNT”). The Company was authorized by the Peoples Republic of China ("PRC") government to operate cable network services in Hubei Province. Since incorporation, the Company had acquired 23 cable entities in Hubei Province. The principal activity of the Company was the provision of cable network service in Hubei Province.

2. Summary of Significant Accounting Policies

Basis of Presentation

The financial statements were prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”).

Use of Estimates

Economic and Political Risks

The Company’s operations are conducted in the PRC. Accordingly, the Company's business, financial condition and results of operations may be influenced by the political, economic and legal environment in the PRC, and by the general state of the PRC economy.

The Company’s operations in the PRC are subject to special considerations and significant risks not typically associated with companies in North America and Western Europe. These include risks associated with, among others, the political, economic and legal environment and foreign currency exchange. The Company’s results may be adversely affected by changes in the political and social conditions in the PRC, and by changes in governmental policies with respect to laws and regulations, anti-inflationary measures, currency conversion, remittances aboard, and rates and methods of taxation, among other things.

Cash and Cash Equivalents

Cash and cash equivalents include all cash and deposits in banks with original maturities of three months or less. All cash and cash equivalents were denominated in Renminbi (“RMB”) with its deposits placed with banks in the PRC.

Inventories

Inventories consist of set-top boxes, cable, parts and accessories. Inventories are stated at the lower of cost or market value. Cost is determined using the first-in, first-out (FIFO) method.

Inventories include maintenance materials, such as spare parts, fiber cable and connection device. Inventory items are removed when they are consumed in construction relating to maintaining or repairing the current cable distribution network.

S-7

HUBEI CHUTIAN VIDEO COMMUNICATION NETWORK CO., LTD.

NOTES TO FINANCIAL STATEMENTS

2.	Summary of Significant Accounting Policies (Continued)

Accounts Receivable

Accounts receivable is recorded at the invoiced amount after deduction of trade discounts, and allowance, if any. The allowance for doubtful accounts is management's best estimates of the amount of probable credit losses in the existing accounts receivable. Management determines the allowance based on historical write-off experience, customer specific facts and economic condition. Management believes that all trade receivables are collectible within its normal operating cycle.

Property, Plant and Equipment

Property, plant and equipment is stated at cost less accumulated depreciation and impairment, if any. In accordance with FASB ASC 922, Financial Reporting by Cable Television Companies , the Company capitalizes costs associated with the construction of new cable transmission and distribution facilities and the installation of new cable services. Capitalized construction and installation costs include materials, labor and applicable overhead costs. Installation activities that are capitalized include (i) the initial connection (or drop) from our cable system to a customer location, (ii) the replacement of a drop, and (iii) the installation of equipment for additional services, such as digital cable, telephone or broadband Internet service. The costs of other customer-facing activities such as reconnecting customer locations where a drop already exists, disconnecting customer locations and repairing or maintaining drops, are expensed as incurred. Interest capitalized with respect to construction activities was not material during any of the periods presented in the accompanying financial statements.

Depreciation of property, plant and equipment is computed using the straight-line method over the following estimated useful lives of the assets: -

	Years
Furniture, fixtures and office equipment	5
Headend facilities	3-7
Motor vehicles	4-10
Fiber infrastructure and electric appliances	8-30
Buildings and building improvements	20-40

Headend facilities are special CATV facilities to receive and distribute cable TV signals. Through the headend, TV signals transferred by trunk cable between municipalities or by satellite are received and transmitted to other sub headends.

Fiber infrastructure means fiber cable laid underground or laid through poles across urban and suburban areas. Cable operators also own cable pipelines and cable poles in some areas and may lease the pipeline and poles in other areas.

Electronic equipment refers to distributor amplifiers, decoders, address modems, mixers and fiber sub stations etc., which changes the fiber signal to electric signals that can be distributed to households TV sets.

Additions, replacements and improvements that extend the asset life are capitalized. Repairs and maintenance are charged to operations when the expense is incurred.

Construction In Progress

Construction in progress represents property, plant and equipment under construction and pending installation and is stated at cost. No provision for depreciation is made on construction in progress until the asset is completed and placed in service. When the assets concerned are placed in service, the costs are transferred to property, plant and equipment and depreciated in accordance with the Company policy.

S-8

HUBEI CHUTIAN VIDEO COMMUNICATION NETWORK CO., LTD.

NOTES TO FINANCIAL STATEMENTS

2. Summary of Significant Accounting Policies (Continued)

Intangible Assets

Intangible assets consist of goodwill, subscriber base and cable operating license.

Intangible assets which are considered to have an indefinite life are not amortized but are tested for impairment at least annually or more frequently if events or circumstances indicate that the asset may be impaired.

Intangible assets which have a finite life are amortized over their estimated useful lives as follows:

	Years
Subscriber Base	10
Cable Operating License	20

Land Use Rights

Land use rights are stated at cost, representing the fair value at the time of acquisition, less accumulated amortization and impairment losses if any. Fair values are supported by valuation reports prepared by independent valuators. After acquisition, the Company does not make registration for the land from Bureau of Land Resources. Amortization expense is recognized on the straight-line basis over the estimated useful life of the intangible assets as follows:

	Years
Land use rights	30

Impairment of Long-lived Assets

The Company periodically evaluates the carrying value of long-lived assets to be held and used, including intangible assets subject to amortization, when events and circumstances warrant such a review. The carrying value of a long-lived asset is considered impaired when the anticipated undiscounted cash flows from such asset is less than its carrying value. In that event, an impairment loss is recognized based on the amount by which the carrying value exceeds the fair value of the long-lived asset. Fair value is determined primarily using the anticipated cash flows discounted at a rate commensurate with the risk involved. Losses on long-lived assets to be disposed of are determined in a similar manner, except that fair values are reduced for the cost to dispose.

Fair Value of Financial Instruments

Level 1

Quoted prices in active markets for identical assets or liabilities.

Level 2

Level 3

Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.

S-9

HUBEI CHUTIAN VIDEO COMMUNICATION NETWORK CO., LTD.

NOTES TO FINANCIAL STATEMENTS

2. Summary of Significant Accounting Policies (Continued)

Comprehensive Income

Off-balance Sheet Arrangements

The Company does not have any off-balance sheet arrangements as of December 31, 2010 and 2009.

Revenue Recognition

The Company recognizes revenue based on the following:

Cable Network Revenue –The Company recognizes revenue from the basic analog and digital cable subscription services (including installation), referred to as subscription services, over our cable network to customers in the period the related services are provided. Subscription services are offered for basic video service (over 90% of the total revenue), extended basic video service, digital video service, and pay TV service. All revenue is collected for the calendar year in advance, with the amount collected depending on when the sale is made during the year. The balance sheet caption service performance obligation-deferred revenue for cable network revenue represents amounts received in advance of the service period.

Installation revenue – Installation revenue, including reconnect fees, related to these services over our cable network is recognized as revenue in the period in which the installation services are completed. Costs related to connections and reconnections are recognized in the consolidated statement of operations as incurred.

Fiber cable rental income – Fiber cable rental income represents the income received from customers for use of the Company’s fiber cable network and is recognized as revenue on a pro-rata basis over the contracted service period.

Employee Benefits

The Company contributes to a state pension scheme in respect of its employees. Full time employees of the Company in the PRC participate in a government mandated multi-employer defined contribution plan pursuant to which certain pension benefits, medical care, unemployment insurance, employee housing fund and other welfare benefits are provided to employees. Chinese labour regulations require that the Company make contributions to the government for these benefits based on certain percentages of the employee's salaries. Other than the employee defined contribution plan, the Company has not provided any other employee benefits.

Income Taxes

S-10

HUBEI CHUTIAN VIDEO COMMUNICATION NETWORK CO., LTD.

NOTES TO FINANCIAL STATEMENTS

2. Summary of Significant Accounting Policies (Continued)

Income Taxes (Continued)

Foreign Currency Translation

The Company’s functional currency is the Renminbi (“RMB”). The Company determine the functional currencies based on the criteria of FASB ASC 830 Foreign Currency Translation and have determined the functional currency to be the local currency. The Company uses the average exchange rate for the period and the exchange rate at the balance sheet date to translate its operating results and financial position, respectively. Any translation gains (losses) are recorded in accumulated other comprehensive income (loss) as a component of shareholders’ equity. Transactions denominated in foreign currencies are translated into the functional currency at the exchange rates prevailing on the transaction dates. Assets and liabilities denominated in foreign currencies are translated into the functional currency at the exchange rates prevailing at the balance sheet date. Exchange gains and losses are included in the statements of income.

Translation of amounts from RMB into United States dollars (“US$”) has been made at the following exchange rates for the respective periods:

December 31, 2010
Balance sheet		RMB6.6227 to US$1.00
Statement of operations and comprehensive loss		RMB6.72565 to US$1.00

December 31, 2009
Balance sheet		RMB6.8282 to US$1.00
Statement of operations and comprehensive loss		RMB6.8314 to US$1.00

3. Recent Changes in Accounting Standards

In January 2010, FASB issued authoritative guidance intended to improve disclosures about fair value measurements. The guidance requires entities to disclose significant transfers in and out of fair value hierarchy levels and the reasons for the transfers and to present information about purchases, sales, issuances and settlements separately in the reconciliation of fair value measurements using significant unobservable inputs (Level 3). Additionally, the guidance clarifies that a reporting entity should provide fair value measurements for each class of assets and liabilities and disclose the inputs and valuation techniques used for fair value measurements using significant other observable inputs (Level 2) and significant unobservable inputs (Level 3). This guidance is effective for interim and annual periods beginning after December 15, 2009 except for the disclosures about purchases, sales, issuances and settlements in the Level 3 reconciliation, which will be effective for interim and annual periods beginning after December 15, 2010. As this guidance provides only disclosure requirements, the adoption of this guidance did not impact Company’s financial condition or results of operations.

S-11

HUBEI CHUTIAN VIDEO COMMUNICATION NETWORK CO., LTD.

NOTES TO FINANCIAL STATEMENTS

3. Recent Changes in Accounting Standards (Continued)

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.

4. Going Concern

The accompanying financial statements are presented on a going concern basis. At December 31, 2010, the Company had a working capital deficit of approximately $29.9 million. The Company generated a net loss of approximately $10.3 million and $2.1 million during the years ended December 31, 2010 and 2009, respectively. These conditions raise 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. The Company's independent registered public accounting firm's report on the financial statements as of and for the year ended December 31, 2010, contained an explanatory paragraph regarding the Company's ability to continue as a going concern.

The shareholders agreed to provide continuing financial support to the Company so as to enable the Company to meet its liabilities as at and when fall due and to continue its business in the foreseeable future.

5. Cash and Cash Equivalents

Financial instruments that potentially subject the Company to significant concentrations of credit risk consist of cash and cash equivalents and pledged deposits. As of December 31, 2010 and 2009, majority of the Company’s cash and cash equivalents were held by major banks located in the PRC, which management believes are high credit quality financial institutions.

6. Prepaid Expenses and Advances

Prepaid expenses and other receivables consist of the following:

	December 31,		December 31,
	2010		2009

Advanced payments	$	3,280,994	$	2,422,896

The advanced payments include loan advanced to staff, which are unsecured, interest-free and repayable on demand. Others are cash advanced to local branches for daily operations, advances for purchase of materials.

S-12

HUBEI CHUTIAN VIDEO COMMUNICATION NETWORK CO., LTD.

NOTES TO FINANCIAL STATEMENTS

7. Property, Plant and Equipment, Net

Property, plant and equipment, net consist of the following:

	December 31,		December 31,
	2010		2009
At cost:
Furniture, fixtures and office equipment	$	970,160	$	313,246
Headend facilities		36,106,247		19,281,372
Motor vehicles		2,315,651		1,655,588
Fiber infrastructure and electric appliances		65,685,878		53,863,941
Buildings and building improvements		11,532,611		10,725,909

Total		116,610,547		85,840,056

Less: accumulated depreciation		33,431,116		17,204,586

Net book value	$	83,179,431	$	68,635,470

At the incorporation, Hubei SOE agreed to transfer assets into the Company in accordance with the Assets Transfer Agreement. The titles of assets will be transferred from Hubei SOE to the Company in stages. Although parts of assets are in the process of changing the title, it does not affect the ownership because both agreements were signed between the Company and Hubei SOE to confirm such transfer of assets.

At December 31, 2010, the buildings and motor vehicles approximately of $6,656,810 and $1,245,266 respectively, are still in the process of applying the title certificates.

There were no impairment provisions made at December 31, 2010 and 2009. Depreciation expense for the years ended December 31, 2010 and 2009 was $15,426,966 and $10,920,381, respectively.

8. Land Use Rights, net

For the year ended December 31, 2010 and 2009, the amortization charge was $7,247 and $5,845 respectively. As of December 31, 2010 and 2009, the carrying value of the land use right was $320,134 and $166,613 respectively.

At December 31, 2010, the land use rights approximately of $336,048 are still in the process of applying the title certificates.

Estimated amortization expenses of the existing land use right for the next five years and thereafter are as follows:

	Amortization
For the years ending December 31,
2011	$	11,176
2012		11,176
2013		11,176
2014		11,176
2015		11,176
Thereafter		264,254
	$	320,134

S-13

HUBEI CHUTIAN VIDEO COMMUNICATION NETWORK CO., LTD.

NOTES TO FINANCIAL STATEMENTS

9. Construction In Progress

Construction in progress represents costs incurred in connection with construction of fiber infrastructure. The construction in progress that was completed during the year was transferred to Property, Plant and Equipment on a monthly basis, with monthly completion and inspection reports. Total construction in progress was $6,276,049 and $3,733,036 at December 31, 2010 and 2009, respectively.

10. Intangible Assets, Net

The following table summarizes the lives and carrying values of the Company's intangible assets by category:

At December 31, 2010

	Useful Life	Gross Amount		Accumulated Amortization			Impairment			Net Carrying Amount
Amortized intangible assets:
Subscriber base	10		4,553,513		(1,138,379	)		(3,415,134	)		-
Cable operating license	20		17,087,081		(2,135,885	)		(944,437	)		14,006,759

Total amortized intangible assets		$	21,640,594	$	(3,274,264	)	$	(4,359,571	)	$	14,006,759

At December 31, 2009

	Useful Life	Gross Amount		Accumulated Amortization			Impairment		Net Carrying Amount
Amortized intangible assets:
Subscriber base	10		4,553,513		(683,027	)		-		3,870,486
Cable operating license	20		17,087,081		(1,281,531	)		-		15,805,550

Total amortized intangible assets		$	21,640,594	$	(1,964,558	)	$	-	$	19,676,036

Amortization expense for the years ended December 31, 2010 and 2009 was $1,309,706 and $1,309,706, respectively.

The Company engaged an independent qualified surveyor to assess the impairment of intangible asset. After completing the assessment, the Company recognized an impairment loss of approximately $4.3 million under U.S. GAAP for the year ended December 31, 2010.

S-14

HUBEI CHUTIAN VIDEO COMMUNICATION NETWORK CO., LTD.

NOTES TO FINANCIAL STATEMENTS

10. Intangible Assets, Net (Continued)

Estimated amortization expenses of the existing intangible assets for the next five years and thereafter are as follows:

	Amortization
For the years ending December 31,
2011	$	700,338
2012		700,338
2013		700,338
2014		700,338
2015		700,338
Thereafter		10,505,069
	$	14,006,759

11. Goodwill

	December 31,		December 31,
	2010		2009

Goodwill	$	19,275,561	$	19,275,561

The Company engaged an independent qualified surveyor to assess the carrying value of goodwill. After completing the assessment, there was no impairment for goodwill under U.S. GAAP for the year ended December 31, 2010.

12. Income Taxes

The Company being established in the PRC was subject to the PRC Enterprise Income Tax (“EIT”) at 33% prior to January 1, 2008. In March 2007, the PRC government enacted the PRC Enterprise Income Tax Law, or the New EIT Law, and promulgated related regulation, Implementing Regulations for the PRC Enterprise Income Tax Law, which became effective from January 1, 2008. The PRC Enterprise Income Tax Law, among other things, imposes a unified income tax rate of 25% for both domestic and foreign invested enterprises registered in the PRC.

In accordance with ERFA(2008) No.7 issued by Hubei Provincial State Tax Bureau on June 18, 2008, Hubei Chutian was granted the tax exemption since the date of incorporation to December 31, 2009.

In accordance with ERCAIJIAOFA(2010) No.71 issued by Hubei Provincial State Tax Bureau on May 26, 2010, Hubei Chutian was granted the profits tax exemption since the date of incorporation to December 31, 2013. Therefore, the Company reversed all tax provision previously made in the financial statement.

The amount of income tax charged to the statement of comprehensive income represents:

	For the year ended December 31, 2010			For the year ended December 31, 2009
PRC
- current income tax	$	-		$	404,086
- deferred income tax		-			-
- over provided income tax in previous year		(485,432	)

Income tax (credit)/expenses	$	(485,432	)	$	404,086

S-15

HUBEI CHUTIAN VIDEO COMMUNICATION NETWORK CO., LTD.

NOTES TO FINANCIAL STATEMENTS

12. Income Taxes (Continued)

A reconciliation of the expected income tax credit/(expense) to the actual income tax expense is as follows:

	For the year ended December 31, 2010			For the year ended December 31, 2009

Loss before income taxes	$	(10,852,867	)	$	(1,749,897	)

Tax calculated at the domestic tax rate of 25%		(2,713,217	)		(437,474	)
Tax effect of expenses not deductible for tax purposes		2,406,021			1,154,391
Income exempted under preferential treatment		-			(312,831	)
Tax effect of tax losses not recognised		307,196			-
Income tax over provided in previous year		(485,432	)		-

Income tax (credit)/expenses	$	(485,432	)	$	404,086

As of December 31, 2010 and 2009, the Company did not have any significant temporary differences and carry forwards that may result in deferred tax. The Company has analyzed the tax positions taken or expected to be taken in its tax filings and has concluded it has no material liability related to uncertain tax positions or unrecognized tax benefits. The Company classifies interest and/or penalties related to income tax matters in income tax expense. For the year ended December 31, 2010 and 2009, the Company has not recognized any amount of interest and penalties related to uncertain tax positions. The Company does not anticipate any significant increases or decreases to its liability for unrecognized tax benefits within the next 12 months.

13. Amount Due From JYNT

The loan advance was unsecured. Interest was fixed at US$1,463,828 (RMB 10,000,000) and repayment was scheduled in 6 instalments to be repaid every 6 months starting from October 1, 2009.

14. Other Current Liabilities

Other current liabilities consist of the following:

	December 31,		December 31,
	2010		2009

Other payable	$	3,280,615	$	2,546,119
Accrued expenses		1,789,574		1,494,728
Accrued salaries and welfare		3,803,746		2,871,851
Provision for taxation - PRC		-		478,127
Accrued interest		5,014		36,613

Total	$	8,878,949	$	7,427,438

S-16

HUBEI CHUTIAN VIDEO COMMUNICATION NETWORK CO., LTD.

NOTES TO FINANCIAL STATEMENTS

14. Other Current Liabilities (Continued)

Other payables are related to loan advance from others, guarantee deposit received from staff and set-top TV rental deposits received from users.

15. Loan From Owners

	December 31,		December 31,
	2010		2009

JYNT	$	52,610,141	$	50,839,692
Hubei SOE		39,334,410		45,619,636

	$	91,944,551	$	96,459,328

The loan from owners represents the long-term investment fund contribute to the Company and the demand for repayment of such loan by owners within one year is remote and therefore classified as long-term liabilities.

16. Statutory Reserves

Under the PRC regulations, the Company is required to set aside at least 10% of their after-tax net profits each year, if any, to fund the statutory reserves until the balance of the reserves reaches 50% of their registered capital. The statutory reserves are not distributable in the form of cash dividends to the Company and can be used to make up cumulative prior year losses. For the years ended December 31, 2010 and 2009, no statutory reserves are contributed by the Company because the Company incurred a significant loss.

17. Registered Capital

	December 31,		December 31,
	2010		2009

Registered capital	$	15,005,484	$	2,940,918

At the date of incorporation, the Company has registered capital of US$2,940,918 (RMB20,100,000). On May 4 2010, the Company has increased its registered capital to US$15,005,484 (RMB100,000,000).

18. Amount Due To Hubei SOE

The amount due to Hubei SOE was unsecured, interest free and repayable on demand.

19. Employee Benefits

Pursuant to the relevant laws and regulations in the PRC, the Company participates in defined contribution retirement plans for its employees arranged by a governmental organization. The Company makes contributions to the retirement plan at the applicable rate based on the employees' salaries. The required contributions under the retirement plans are charged to the statements of operations on an accrual basis. The Company's contributions totalled USD$2,358,483 and USD$2,106,318 for the year ended December 31, 2010 and 2009, respectively.

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HUBEI CHUTIAN VIDEO COMMUNICATION NETWORK CO., LTD.

NOTES TO FINANCIAL STATEMENTS

20. Commitments and Contingencies

21. Operating Risk

Concentrations of credit risk

Financial instruments that potentially subject the Company to significant concentrations of credit risk primarily consist of cash and cash equivalents, and accounts and other receivable. As of December 31, 2010 and 2009, all of the Company’s cash and cash equivalents were managed by several financial institutions located in the PRC. The management believes those financial institutions are of high credit quality financial institutions. Historically, deposits in Chinese banks are secured due to the state policy on protecting depositors’ interests.

Foreign exchange risk

Substantially all of the Company’s businesses are transacted in RMB, which is not freely convertible into foreign currencies. The unification of the exchange rates does not imply the convertibility of RMB into US$ or other foreign currencies. All foreign exchange transactions continue to take place either through the People’s Bank of China or other banks authorized to buy and sell foreign currencies at the exchange rates quoted by the People’s Bank of China.

Business operations are substantially in foreign countries

All of the Company’s operations and assets are located in the PRC. Accordingly, the Company’s operations are subject to various political, economic, and other risks and uncertainties inherent in the PRC. The Company’s operations are subject to the risks of restrictions on transfer of funds; tax policies; foreign exchange restrictions; and political conditions and governmental policies.

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