0001144204-13-067856.txt : 20131218 0001144204-13-067856.hdr.sgml : 20131218 20131218141340 ACCESSION NUMBER: 0001144204-13-067856 CONFORMED SUBMISSION TYPE: 20-F/A PUBLIC DOCUMENT COUNT: 10 CONFORMED PERIOD OF REPORT: 20111231 FILED AS OF DATE: 20131218 DATE AS OF CHANGE: 20131218 FILER: COMPANY DATA: COMPANY CONFORMED NAME: China Cablecom Holdings, Ltd. CENTRAL INDEX KEY: 0001416569 STANDARD INDUSTRIAL CLASSIFICATION: CABLE & OTHER PAY TELEVISION SERVICES [4841] IRS NUMBER: 000000000 STATE OF INCORPORATION: D8 FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 20-F/A SEC ACT: 1934 Act SEC FILE NUMBER: 001-34136 FILM NUMBER: 131284813 BUSINESS ADDRESS: STREET 1: 1 GRAND GATEWAY STREET 2: 1 HONGQIAN ROAD CITY: SHANGHAI, STATE: F4 ZIP: 200030 BUSINESS PHONE: (86) 21 6207-9731 MAIL ADDRESS: STREET 1: 1 GRAND GATEWAY STREET 2: 1 HONGQIAN ROAD CITY: SHANGHAI, STATE: F4 ZIP: 200030 20-F/A 1 v362931_20f-a.htm FORM 20-F/A
  

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

Amendment No. 1 on
FORM 20-F/A

 

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

 

OR

 

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

 

For the fiscal year ended December 31, 2011.

 

OR

 

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

 

OR

 

£ 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)

 

Kerry Propper, (646) 465-9000

17 State Street, Suite 2575, 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

  

None

   

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, 2011, the registrant had 13,693,780 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).

 

S Yes               £ 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

 
 

 

EXPLANATORY NOTE

 

This Amendment No. 1 to the Annual Report on Form 20-F of China Cablecom Holdings Limited (the “Company”) amends the Company’s Annual Report on Form 20-F for the year ended December 31, 2011, (the “Original Filing”) which was filed with the Securities and Exchange Commission on October 2, 2013. The Company is filing this Amendment No. 1 solely to provide Exhibit 101, which was not included in the Original Filing. Exhibit 101 includes information about the Company in Extensible Business Reporting Language (XBRL).

 

In accordance with Rule 12b-15 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), this Amendment No. 1 is accompanied by currently dated certifications on Exhibits 12.1, 12.2 and 13.1 by our chief executive officer and chief financial officer. Except as specifically referenced herein, this Amendment No. 1 does not reflect any event occurring subsequent to October 2, 2013, the filing date of the original report. Accordingly, this Amendment No. 1 should be read in conjunction with our other filings with the Securities and Exchange Commission.

 

Pursuant to Rule 406T of Regulation S-T, these interactive data files are deemed not filed or part of a registration statement or prospectus for purposes of Section 11 or 12 of the Securities Act of 1933, and are deemed not filed for purposes of Section 18 of the Securities and Exchange Act of 1934, and otherwise are not subject to liability under these sections.

 

 

i
 

 

 

TABLE OF CONTENTS

 

PART III          
  ITEM 19.   EXHIBITS   44

 

ii
 

 

 

PART III  

 

 

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

 

44
 

 

Exhibit

Number

  Description of Exhibit
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.

 

45
 

 

Exhibit

Number

  Description of Exhibit
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
4.70 ***   Termination Agreement among Hubei Chutian Radio and Television Information Network Co., Ltd., Jinan Youxiantong Network Technology Co., Ltd., and Hubei Chutian Video Communication Network Co., Ltd. dated March 22, 2012.
4.71 ***   Equity Transfer Agreement among Hubei Chutian Radio and Television Information Network Co., Ltd., Jinan Youxiantong Network Technology Co., Ltd., and Hubei Chutian Video Communication Network Co., Ltd. dated June 15, 2012
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.

 

101** Interactive Data File

 

* Incorporated by reference to the similarly numbered exhibit to the Annual Report on Form 20-F filed on July 1, 2010.

 

** Filed herewith.

 

*** Previously Filed

 

(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.

 

46
 

 

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: 2013-12-18   Date: 2013-12-18  

 

47
 

 

EX-12.1 2 v362931_ex12-1.htm EXHIBIT 12.1

EXHIBIT 12.1

 

CERTIFICATION BY PRINCIPAL EXECUTIVE OFFICER

PURSUANT TO RULES 13a-14 and 15d-14

OF THE SECURITIES EXCHANGE ACT OF 1934

 

I, Pu Yue, certify that:

 

1. I have reviewed this annual report on Form 20-F/A for the fiscal year ended December 31, 2011 of China Cablecom Holdings, Ltd. (the “Registrant”);

 

2. Based on my knowledge, this annual report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this annual report;

 

3. Based on my knowledge, the financial statements and other financial information included in this annual report fairly present in all material respects the financial condition, results of operations and cash flows of the Registrant as of, and for, the periods presented in this annual report;

 

4. The Registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the Registrant and have:

 

  (a) designed such disclosure controls and procedures, or caused such disclosure control and procedures to be designed under our supervision, to ensure that material information relating to the Registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this annual report is being prepared;

 

  (b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

 

  (c) evaluated the effectiveness of the Registrant’s disclosure controls and procedures and presented in this annual report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this annual report based on such evaluation; and

 

  (d) disclosed in this annual report any change in the Registrant’s internal control over financial reporting that occurred during the period covered by the annual report that has materially affected, or is reasonably likely to materially affect, the Registrant’s internal control over financial reporting; and;

 

5. The Registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Registrant’s auditors and the audit committee of the Registrant’s board of directors (or persons performing the equivalent function):

 

  (a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Registrant’s ability to record, process, summarize and report financial information; and

 

  (b) any fraud, whether or not material, that involves management or other employees who have a significant role in the Registrant’s internal control over financial reporting.

 

Date: December 18, 2013


/s/ Pu Yue  
Name:  Pu Yue  
Title:  Chief Executive Officer  

 

 

EX-12.2 3 v362931_ex12-2.htm EXHIBIT 12.2

 

EXHIBIT 12.2

 

CERTIFICATION BY PRINCIPAL FINANCIAL OFFICER

PURSUANT TO RULES 13a-14 and 15d-14

OF THE SECURITIES EXCHANGE ACT OF 1934

 

I, Sikan Tong, certify that:

 

1. I have reviewed this annual report on Form 20-F for the fiscal year ended December 31, 2011 of China Cablecom Holdings, Ltd. (the “Registrant”);

 

2. Based on my knowledge, this annual report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this annual report;

 

3. Based on my knowledge, the financial statements and other financial information included in this annual report fairly present in all material respects the financial condition, results of operations and cash flows of the Registrant as of, and for, the periods presented in this annual report;

 

4. The Registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the Registrant and have:

 

  (a) designed such disclosure controls and procedures, or caused such disclosure control and procedures to be designed under our supervision, to ensure that material information relating to the Registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this annual report is being prepared;

 

  (b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

 

  (c) evaluated the effectiveness of the Registrant’s disclosure controls and procedures and presented in this annual report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this annual report based on such evaluation; and

 

  (d) disclosed in this annual report any change in the Registrant’s internal control over financial reporting that occurred during the period covered by the annual report that has materially affected, or is reasonably likely to materially affect, the Registrant’s internal control over financial reporting; and

 

5. The Registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Registrant’s auditors and the audit committee of the Registrant’s board of directors (or persons performing the equivalent function):

 

  (a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Registrant’s ability to record, process, summarize and report financial information; and

 

  (b) any fraud, whether or not material, that involves management or other employees who have a significant role in the Registrant’s internal control over financial reporting.

 

Date: December 18, 2013

 

/s/ Sikan Tong  
Name:  Sikan Tong  
Title:  Chief Financial Officer  

 

 

EX-13.1 4 v362931_ex13-1.htm EXHIBIT 13.1

EXHIBIT 13.1

 

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

 

In connection with the Annual Report of China Cablecom Holdings, Ltd. (the “Registrant”) on Form 20-F/A for the year ended December 31, 2011, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), we, Pu Yue and Sikan Tong, the Chief Executive Officer and Chief Financial Officer of the Registrant, respectively certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 that, to the best of our knowledge:

 

(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

 

(2) The information contained in the report fairly presents, in all material respects, the financial condition and results of operations of the Registrant.

 

Pursuant to the rules and regulations of the Securities and Exchange Commission, this certification is being furnished and not deemed filed.

 

December 18, 2013

 

/s/ Pu Yue  
Name:  Pu Yue  
Title:  Chief Executive Officer  
   
/s/ Sikan Tong  
Name:  Sikan Tong  
Title:  Chief Financial Officer  

 

A signed original of this written statement required by Section 906 has been provided to the Registrant and will be retained by the Registrant and furnished to the Securities and Exchange Commission or its staff upon request.

 

 

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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&#8217;s daily operations and financial affairs, appoint their senior executives and approve all matters requiring shareholder vote.&#160;</div> <div style="clear:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px"> &#160;</div> <div style="clear:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px"> 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.</div> <div style="clear:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px"> &#160;</div> <div style="clear:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px"> In late 2010, the Government of Shandong Province made an announcement for the consolidation of its provincial cable assets in Shandong Province. In accordance with &#8220;Lu Ban Fa&#8221; (2010) No.18, the Province will create a new company namely &#8220;Shandong Broadcasting and Television Network Co., Ltd.&#8221; and required all the cable network companies in Shandong Province to transfer all its assets and revenue to Shandong Broadcasting and Television Network Co., Ltd. Under this government policy, Binzhou Broadcasting was also required to transfer all its assets and revenue to the new company with effective from September 16, 2011. The business operation of Binzhou Broadcasting was suspended effective September 16, 2011. All the contractual agreement and the exclusive services agreement made between JYNT, Binzhou SOE and Binzhou Broadcasting were effectively terminated accordingly.</div> <div style="clear:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px"> &#160;</div> <div style="clear:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px"> During the year ended December 31, 2011, Binzhou SOE charged a penalty of $754,979 (RMB5,000,000) against JYNT for the failure of settlement of further capital contribution of $16 million in accordance with the &#8220;Amendment Framework Agreement&#8221;. As a result, the economic benefit percentage of JYNT and Binzhou SOE in Binzhou Broadcasting was proportionally adjusted to reflect the actual fund provided and the deduction of penalty. The parties are currently negotiating the existence and continued operations of Binzhou Broadcasting and the extent of the continued obligations of JYNT.</div> <div style="clear:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px"> &#160;</div> <div style="clear:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px"> On June 16, 2008, the Company announced the phase one acquisition of Hubei Chutian Video Communication Network Co., Ltd (&#8220;Hubei Chutian&#8221;) 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, as well as received 11% of the economic benefits in Hubei Chutian, through an exclusive technical services agreement, for total consideration of approximately $60.4 million. This exclusive technical services agreement provides marketing, strategic consulting and technical support and services for 11% of the net profits of Hubei Chutian.</div> <div style="clear:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px"> &#160;</div> <div style="clear:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px"> 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. The total consideration was changed to approximately $55.6 million. Besides, Hubei Chutian guaranteed to pay a 8% minimum rate of return on investment to JYNT if the return from service charge together with the share of 49% equity interest of Hubei Chutian was less than that minimum rate. The guarantee return was treated as management fee income received by JYNT.</div> <div style="clear:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt"> &#160;</div> <div style="clear:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px"> In addition, in accordance with the operating partnership and other agreements (&#8220;Framework Agreement&#8221;) 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&#8217;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&#8217;s daily operations and financial affairs, appoint their senior executives and approve all matters requiring shareholder vote.</div> <div style="clear:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px"> &#160;</div> <div style="clear:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px"> 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.</div> <div style="clear:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px"> <b>&#160;</b></div> <div style="clear:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px"> On October 20, 2011, JYNT was approached by the joint venture partner, Hubei SOE, regarding the purchase of the assets and equity interest in Hubei Chutian. The proposed offer was agreed and approved by the Board of Directors of the Company. The parties entered into a Termination Agreement on March 22, 2012 and an Equity Transfer Agreement on June 15, 2012, pursuant to which the parties agreed to consideration of $59,378,819 (RMB374,140,000) for the purchase by Hubei SOE of the assets and equity interest in Hubei Chutian to be received in six installments. The first installment of $7,935,374 (RMB50,000,000) was paid on March 22, 2012 as termination compensation; the second installment of $16,029,456 (RMB101,000,000) was paid on June 15, 2012; the third installment of $7,935,374 (RMB50,000,000) is due on the date when representative of JYNT and Hubei SOE go to the Administration for Industry and Commerce to submit the application for the change of registration of Hubei Chutian; the fourth installment of $7,935,374 (RMB50,000,000) is due prior to July 25, 2012; the fifth installment of $11,609,524 (RMB73,140,000) is due prior to August 25, 2012 and the final installment of $7,935,374 (RMB50,000,000) is due prior to September 25, 2012. In accordance with the terms of the agreement, JYNT agreed to transfer back its entire 49% equity interest in Hubei Chutian to the Hubei SOE and terminate the joint venture contractual agreement, technical services agreement and loan agreement with Hubei Chutian and Hubei SOE respectively. As a result, Hubei Chutian was no longer the operating joint venture of JYNT since then. Up to the date of this report, the Company had received totally $59,061,404 (RMB372,140,000) from Hubei SOE and the balance of $317,415 (RMB2,000,000) was kept as retention money as requested by Hubei SOE and will be refunded afterward.</div> <div style="clear:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px"> &#160;</div> <div style="clear:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px"> <b>Basis of Presentation</b></div> <div style="clear:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px"> <b>&#160;</b></div> <div style="clear:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px"> The consolidated financial statements, prepared in accordance with U.S. GAAP, include the financial statements of China Cablecom Holdings, Ltd., and its wholly owned or controlled subsidiaries and its consolidated variable interest entities as listed above. A consolidated variable interest entity is a variable interest entity of which the Company is the primary beneficiary under FASB ASC 810-10. All significant inter-company transactions and balances between the Company, its subsidiaries and VIEs are eliminated upon consolidation. 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TEXT-ALIGN: left"> <div>$</div> </td> <td style="WIDTH: 12%; TEXT-ALIGN: right"> <div>142,466</div> </td> <td style="WIDTH: 1%; TEXT-ALIGN: left"> <div>&#160;</div> </td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: white"> <td style="PADDING-BOTTOM: 1pt; TEXT-ALIGN: left; PADDING-LEFT: 16.2pt; TEXT-INDENT: -0.1in"> <div>Prepaid expenses and advances</div> </td> <td style="PADDING-BOTTOM: 1pt"> <div>&#160;</div> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left"> <div>&#160;</div> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right"> <div>3,705</div> </td> <td style="PADDING-BOTTOM: 1pt; TEXT-ALIGN: left"> <div>&#160;</div> </td> <td style="PADDING-BOTTOM: 1pt"> <div>&#160;</div> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left"> <div>&#160;</div> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right"> <div>5,033</div> </td> <td style="PADDING-BOTTOM: 1pt; TEXT-ALIGN: left"> <div>&#160;</div> </td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: rgb(204,255,204)"> <td style="PADDING-BOTTOM: 1pt; TEXT-ALIGN: left; PADDING-LEFT: 0.35in; TEXT-INDENT: -0.1in"> <div>Total Current Assets</div> </td> <td style="PADDING-BOTTOM: 1pt"> <div>&#160;</div> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left"> <div>&#160;</div> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right"> <div>105,321</div> </td> <td style="PADDING-BOTTOM: 1pt; TEXT-ALIGN: left"> <div>&#160;</div> </td> <td style="PADDING-BOTTOM: 1pt"> <div>&#160;</div> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left"> <div>&#160;</div> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right"> <div>147,499</div> </td> <td style="PADDING-BOTTOM: 1pt; TEXT-ALIGN: left"> <div>&#160;</div> </td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: white"> <td style="TEXT-ALIGN: left; PADDING-LEFT: 0.1in; TEXT-INDENT: -0.1in"> <div>Property, plant &amp; equipment, net</div> </td> <td> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: right"> <div>5,296</div> </td> <td style="TEXT-ALIGN: left"> <div>&#160;</div> </td> <td> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: right"> <div>7,372</div> </td> <td style="TEXT-ALIGN: left"> <div>&#160;</div> </td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: rgb(204,255,204)"> <td style="PADDING-BOTTOM: 1pt; TEXT-ALIGN: left; PADDING-LEFT: 0.1in; TEXT-INDENT: -0.1in"> <div>Investment in operating joint venture</div> </td> <td style="PADDING-BOTTOM: 1pt"> <div>&#160;</div> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left"> <div>&#160;</div> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right"> <div>50,378,205</div> </td> <td style="PADDING-BOTTOM: 1pt; TEXT-ALIGN: left"> <div>&#160;</div> </td> <td style="PADDING-BOTTOM: 1pt"> <div>&#160;</div> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left"> <div>&#160;</div> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right"> <div>64,026,705</div> </td> <td style="PADDING-BOTTOM: 1pt; TEXT-ALIGN: left"> <div>&#160;</div> </td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: white"> <td style="PADDING-LEFT: 0.1in; TEXT-INDENT: -0.1in"> <div>&#160;</div> </td> <td> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: right"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left"> <div>&#160;</div> </td> <td> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: right"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left"> <div>&#160;</div> </td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: rgb(204,255,204)"> <td style="PADDING-BOTTOM: 2.5pt; TEXT-ALIGN: left; PADDING-LEFT: 0.35in; TEXT-INDENT: -0.1in"> <div>Total Assets</div> </td> <td style="PADDING-BOTTOM: 2.5pt"> <div>&#160;</div> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left"> <div>$</div> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right"> <div>50,488,822</div> </td> <td style="PADDING-BOTTOM: 2.5pt; TEXT-ALIGN: left"> <div>&#160;</div> </td> <td style="PADDING-BOTTOM: 2.5pt"> <div>&#160;</div> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left"> <div>$</div> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right"> <div>64,181,576</div> </td> <td style="PADDING-BOTTOM: 2.5pt; TEXT-ALIGN: left"> <div>&#160;</div> </td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: white"> <td style="PADDING-LEFT: 0.1in; TEXT-INDENT: -0.1in"> <div>&#160;</div> </td> <td> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: right"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left"> <div>&#160;</div> </td> <td> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: right"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left"> <div>&#160;</div> </td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: rgb(204,255,204)"> <td style="TEXT-DECORATION: underline; FONT-WEIGHT: bold; PADDING-LEFT: 0.1in; TEXT-INDENT: -0.1in"> <div>LIABILITIES</div> </td> <td> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: right"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left"> <div>&#160;</div> </td> <td> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: right"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left"> <div>&#160;</div> </td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: white"> <td style="TEXT-ALIGN: left; PADDING-LEFT: 0.1in; TEXT-INDENT: -0.1in"> <div>Current Liabilities:</div> </td> <td> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: right"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left"> <div>&#160;</div> </td> <td> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: right"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left"> <div>&#160;</div> </td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: rgb(204,255,204)"> <td style="TEXT-ALIGN: left; PADDING-LEFT: 16.2pt; TEXT-INDENT: -0.1in"> <div>Other current liabilities</div> </td> <td> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left"> <div>$</div> </td> <td style="TEXT-ALIGN: right"> <div>2,336,801</div> </td> <td style="TEXT-ALIGN: left"> <div>&#160;</div> </td> <td> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left"> <div>$</div> </td> <td style="TEXT-ALIGN: right"> <div>1,231,998</div> </td> <td style="TEXT-ALIGN: left"> <div>&#160;</div> </td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: white"> <td style="TEXT-ALIGN: left; PADDING-LEFT: 16.2pt; TEXT-INDENT: -0.1in"> <div>Amount due to HZNT</div> </td> <td> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: right"> <div>26,065,169</div> </td> <td style="TEXT-ALIGN: left"> <div>&#160;</div> </td> <td> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: right"> <div>24,797,141</div> </td> <td style="TEXT-ALIGN: left"> <div>&#160;</div> </td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: rgb(204,255,204)"> <td style="TEXT-ALIGN: left; PADDING-LEFT: 16.2pt; TEXT-INDENT: -0.1in"> <div>Amount due to China Cablecom</div> </td> <td> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: right"> <div>39,275,207</div> </td> <td style="TEXT-ALIGN: left"> <div>&#160;</div> </td> <td> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: right"> <div>37,506,013</div> </td> <td style="TEXT-ALIGN: left"> <div>&#160;</div> </td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: white"> <td style="PADDING-BOTTOM: 1pt; TEXT-ALIGN: left; PADDING-LEFT: 16.2pt; TEXT-INDENT: -0.1in"> <div>Amount due to Hubei Chutian</div> </td> <td style="PADDING-BOTTOM: 1pt"> <div>&#160;</div> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left"> <div>&#160;</div> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right"> <div>3,189,195</div> </td> <td style="PADDING-BOTTOM: 1pt; TEXT-ALIGN: left"> <div>&#160;</div> </td> <td style="PADDING-BOTTOM: 1pt"> <div>&#160;</div> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left"> <div>&#160;</div> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right"> <div>7,050,397</div> </td> <td style="PADDING-BOTTOM: 1pt; TEXT-ALIGN: left"> <div>&#160;</div> </td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: rgb(204,255,204)"> <td style="PADDING-LEFT: 0.1in; TEXT-INDENT: -0.1in"> <div>&#160;</div> </td> <td> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: right"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left"> <div>&#160;</div> </td> <td> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: right"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left"> <div>&#160;</div> </td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: white"> <td style="PADDING-BOTTOM: 1pt; TEXT-ALIGN: left; PADDING-LEFT: 0.35in; TEXT-INDENT: -0.1in"> <div>Total Liabilities</div> </td> <td style="PADDING-BOTTOM: 1pt"> <div>&#160;</div> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left"> <div>&#160;</div> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right"> <div>70,866,372</div> </td> <td style="PADDING-BOTTOM: 1pt; TEXT-ALIGN: left"> <div>&#160;</div> </td> <td style="PADDING-BOTTOM: 1pt"> <div>&#160;</div> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left"> <div>&#160;</div> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right"> <div>70,585,549</div> </td> <td style="PADDING-BOTTOM: 1pt; TEXT-ALIGN: left"> <div>&#160;</div> </td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: rgb(204,255,204)"> <td style="PADDING-LEFT: 0.1in; TEXT-INDENT: -0.1in"> <div>&#160;</div> </td> <td> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: right"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left"> <div>&#160;</div> </td> <td> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: right"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left"> <div>&#160;</div> </td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: white"> <td style="TEXT-DECORATION: underline; FONT-WEIGHT: bold; TEXT-ALIGN: left; PADDING-LEFT: 0.1in; TEXT-INDENT: -0.1in"> <div>OWNERS&#8217; EQUITY</div> </td> <td> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: right"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left"> <div>&#160;</div> </td> <td> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: right"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left"> <div>&#160;</div> </td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: rgb(204,255,204)"> <td style="TEXT-ALIGN: left; PADDING-LEFT: 0.1in; TEXT-INDENT: -0.1in"> <div>Registered Capital</div> </td> <td> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: right"> <div>69,728</div> </td> <td style="TEXT-ALIGN: left"> <div>&#160;</div> </td> <td> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: right"> <div>69,728</div> </td> <td style="TEXT-ALIGN: left"> <div>&#160;</div> </td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: white"> <td style="TEXT-ALIGN: left; PADDING-LEFT: 0.1in; TEXT-INDENT: -0.1in"> <div>Additional paid-in capital</div> </td> <td> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: right"> <div>79,812</div> </td> <td style="TEXT-ALIGN: left"> <div>&#160;</div> </td> <td> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: right"> <div>79,812</div> </td> <td style="TEXT-ALIGN: left"> <div>&#160;</div> </td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: rgb(204,255,204)"> <td style="TEXT-ALIGN: left; PADDING-LEFT: 0.1in; TEXT-INDENT: -0.1in"> <div>Accumulated deficit</div> </td> <td> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: right"> <div>(15,990,313</div> </td> <td style="TEXT-ALIGN: left"> <div>)</div> </td> <td> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: right"> <div>(6,028,997</div> </td> <td style="TEXT-ALIGN: left"> <div>)</div> </td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: white"> <td style="PADDING-BOTTOM: 1pt; TEXT-ALIGN: left; PADDING-LEFT: 0.1in; TEXT-INDENT: -0.1in"> <div>Accumulated other comprehensive loss</div> </td> <td style="PADDING-BOTTOM: 1pt"> <div>&#160;</div> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left"> <div>&#160;</div> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right"> <div>(4,536,777</div> </td> <td style="PADDING-BOTTOM: 1pt; TEXT-ALIGN: left"> <div>)</div> </td> <td style="PADDING-BOTTOM: 1pt"> <div>&#160;</div> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left"> <div>&#160;</div> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right"> <div>(524,516</div> </td> <td style="PADDING-BOTTOM: 1pt; TEXT-ALIGN: left"> <div>)</div> </td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: rgb(204,255,204)"> <td style="PADDING-LEFT: 0.1in; TEXT-INDENT: -0.1in"> <div>&#160;</div> </td> <td> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: right"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left"> <div>&#160;</div> </td> <td> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: right"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left"> <div>&#160;</div> </td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: white"> <td style="PADDING-BOTTOM: 1pt; TEXT-ALIGN: left; PADDING-LEFT: 0.1in; TEXT-INDENT: -0.1in"> <div>Total owners&#8217; deficiency</div> </td> <td style="PADDING-BOTTOM: 1pt"> <div>&#160;</div> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left"> <div>&#160;</div> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right"> <div>(20,377,550</div> </td> <td style="PADDING-BOTTOM: 1pt; TEXT-ALIGN: left"> <div>)</div> </td> <td style="PADDING-BOTTOM: 1pt"> <div>&#160;</div> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left"> <div>&#160;</div> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right"> <div>(6,403,973</div> </td> <td style="PADDING-BOTTOM: 1pt; TEXT-ALIGN: left"> <div>)</div> </td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: rgb(204,255,204)"> <td style="PADDING-LEFT: 0.1in; TEXT-INDENT: -0.1in"> <div>&#160;</div> </td> <td> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: right"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left"> <div>&#160;</div> </td> <td> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: right"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left"> <div>&#160;</div> </td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: white"> <td style="PADDING-BOTTOM: 2.5pt; TEXT-ALIGN: left; PADDING-LEFT: 0.35in; TEXT-INDENT: -0.1in"> <div>Total liabilities and owners&#8217; deficiency</div> </td> <td style="PADDING-BOTTOM: 2.5pt"> <div>&#160;</div> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left"> <div>$</div> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right"> <div>50,488,822</div> </td> <td style="PADDING-BOTTOM: 2.5pt; TEXT-ALIGN: left"> <div>&#160;</div> </td> <td style="PADDING-BOTTOM: 2.5pt"> <div>&#160;</div> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left"> <div>$</div> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right"> <div>64,181,576</div> </td> <td style="PADDING-BOTTOM: 2.5pt; TEXT-ALIGN: left"> <div>&#160;</div> </td> </tr> </table> </div> <div style="clear:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px"> &#160;</div> <div style="clear:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px"> The following table shows the Statements of Operations of JYNT for the years ended December 31, 2011 and 2010:</div> <div style="clear:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px"> &#160;</div> <div style="clear:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 0in"> <table style="WIDTH: 100%; BORDER-COLLAPSE: collapse; FONT: 10pt Times New Roman, Times, Serif" cellspacing="0" cellpadding="0"> <tr style="VERTICAL-ALIGN: bottom"> <td style="white-space:nowrap;"> <div>&#160;</div> </td> <td style="white-space:nowrap;"> <div>&#160;</div> </td> <td style="white-space:nowrap; TEXT-ALIGN: center" colspan="2"> <div>For the year ended</div> </td> <td style="white-space:nowrap;"> <div>&#160;</div> </td> <td style="white-space:nowrap;"> <div>&#160;</div> </td> <td style="white-space:nowrap; TEXT-ALIGN: center" colspan="2"> <div>For the year ended</div> </td> <td style="white-space:nowrap;"> <div>&#160;</div> </td> </tr> <tr style="VERTICAL-ALIGN: bottom"> <td style="white-space:nowrap;"> <div>&#160;</div> </td> <td style="white-space:nowrap; PADDING-BOTTOM: 1pt"> <div>&#160;</div> </td> <td style="white-space:nowrap; BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center" colspan="2"> <div>December 31, 2011</div> </td> <td style="white-space:nowrap; PADDING-BOTTOM: 1pt"> <div>&#160;</div> </td> <td style="white-space:nowrap; PADDING-BOTTOM: 1pt"> <div>&#160;</div> </td> <td style="white-space:nowrap; BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center" colspan="2"> <div>December 31, 2010</div> </td> <td style="white-space:nowrap; PADDING-BOTTOM: 1pt"> <div>&#160;</div> </td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: rgb(204,255,204)"> <td style="WIDTH: 68%; TEXT-ALIGN: left; PADDING-LEFT: 0.1in; TEXT-INDENT: -0.1in"> <div>Management fee income</div> </td> <td style="WIDTH: 2%"> <div>&#160;</div> </td> <td style="WIDTH: 1%; TEXT-ALIGN: left"> <div>$</div> </td> <td style="WIDTH: 12%; TEXT-ALIGN: right"> <div>4,632,022</div> </td> <td style="WIDTH: 1%; TEXT-ALIGN: left"> <div>&#160;</div> </td> <td style="WIDTH: 2%"> <div>&#160;</div> </td> <td style="WIDTH: 1%; TEXT-ALIGN: left"> <div>$</div> </td> <td style="WIDTH: 12%; TEXT-ALIGN: right"> <div>4,450,438</div> </td> <td style="WIDTH: 1%; TEXT-ALIGN: left"> <div>&#160;</div> </td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: white"> <td style="PADDING-BOTTOM: 1pt; TEXT-ALIGN: left; PADDING-LEFT: 0.1in; TEXT-INDENT: -0.1in"> <div>Share of loss on operating joint ventures</div> </td> <td style="PADDING-BOTTOM: 1pt"> <div>&#160;</div> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left"> <div>&#160;</div> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right"> <div>(2,448,005</div> </td> <td style="PADDING-BOTTOM: 1pt; TEXT-ALIGN: left"> <div>)</div> </td> <td style="PADDING-BOTTOM: 1pt"> <div>&#160;</div> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left"> <div>&#160;</div> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right"> <div>(8,247,873</div> </td> <td style="PADDING-BOTTOM: 1pt; TEXT-ALIGN: left"> <div>)</div> </td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: rgb(204,255,204)"> <td style="PADDING-BOTTOM: 1pt; PADDING-LEFT: 0.1in; TEXT-INDENT: -0.1in"> <div>&#160;</div> </td> <td style="PADDING-BOTTOM: 1pt"> <div>&#160;</div> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left"> <div>&#160;</div> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right"> <div>2,184,017</div> </td> <td style="PADDING-BOTTOM: 1pt; TEXT-ALIGN: left"> <div>&#160;</div> </td> <td style="PADDING-BOTTOM: 1pt"> <div>&#160;</div> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left"> <div>&#160;</div> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right"> <div>(3,797,435</div> </td> <td style="PADDING-BOTTOM: 1pt; TEXT-ALIGN: left"> <div>)</div> </td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: white"> <td style="TEXT-ALIGN: left; PADDING-LEFT: 0.1in; TEXT-INDENT: -0.1in"> <div>Operating expenses</div> </td> <td> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: right"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left"> <div>&#160;</div> </td> <td> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: right"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left"> <div>&#160;</div> </td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: rgb(204,255,204)"> <td style="PADDING-BOTTOM: 1pt; TEXT-ALIGN: left; PADDING-LEFT: 16.2pt; TEXT-INDENT: -0.1in"> <div>General and administrative expenses</div> </td> <td style="PADDING-BOTTOM: 1pt"> <div>&#160;</div> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left"> <div>&#160;</div> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right"> <div>52,673</div> </td> <td style="PADDING-BOTTOM: 1pt; TEXT-ALIGN: left"> <div>&#160;</div> </td> <td style="PADDING-BOTTOM: 1pt"> <div>&#160;</div> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left"> <div>&#160;</div> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right"> <div>59,888</div> </td> <td style="PADDING-BOTTOM: 1pt; TEXT-ALIGN: left"> <div>&#160;</div> </td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: white"> <td style="PADDING-BOTTOM: 1pt; TEXT-ALIGN: left; PADDING-LEFT: 0.35in; TEXT-INDENT: -0.1in"> <div>Total operating expenses</div> </td> <td style="PADDING-BOTTOM: 1pt"> <div>&#160;</div> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left"> <div>&#160;</div> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right"> <div>52,673</div> </td> <td style="PADDING-BOTTOM: 1pt; TEXT-ALIGN: left"> <div>&#160;</div> </td> <td style="PADDING-BOTTOM: 1pt"> <div>&#160;</div> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left"> <div>&#160;</div> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right"> <div>59,888</div> </td> <td style="PADDING-BOTTOM: 1pt; TEXT-ALIGN: left"> <div>&#160;</div> </td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: rgb(204,255,204)"> <td style="PADDING-BOTTOM: 1pt; TEXT-ALIGN: left; PADDING-LEFT: 0.1in; TEXT-INDENT: -0.1in"> <div>Profit / (loss) from operations</div> </td> <td style="PADDING-BOTTOM: 1pt"> <div>&#160;</div> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left"> <div>&#160;</div> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right"> <div>2,131,344</div> </td> <td style="PADDING-BOTTOM: 1pt; TEXT-ALIGN: left"> <div>&#160;</div> </td> <td style="PADDING-BOTTOM: 1pt"> <div>&#160;</div> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left"> <div>&#160;</div> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right"> <div>(3,857,323</div> </td> <td style="PADDING-BOTTOM: 1pt; TEXT-ALIGN: left"> <div>)</div> </td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: white"> <td style="TEXT-ALIGN: left; PADDING-LEFT: 0.1in; TEXT-INDENT: -0.1in"> <div>&#160;</div> </td> <td> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: right"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left"> <div>&#160;</div> </td> <td> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: right"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left"> <div>&#160;</div> </td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: rgb(204,255,204)"> <td style="TEXT-ALIGN: left; PADDING-LEFT: 0.1in; TEXT-INDENT: -0.1in"> <div>Other income / (expenses)</div> </td> <td> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: right"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left"> <div>&#160;</div> </td> <td> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: right"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left"> <div>&#160;</div> </td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: white"> <td style="TEXT-ALIGN: left; PADDING-LEFT: 16.2pt; TEXT-INDENT: -0.1in"> <div>Interest income</div> </td> <td> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: right"> <div>549</div> </td> <td style="TEXT-ALIGN: left"> <div>&#160;</div> </td> <td> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: right"> <div>8,092</div> </td> <td style="TEXT-ALIGN: left"> <div>&#160;</div> </td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: rgb(204,255,204)"> <td style="TEXT-ALIGN: left; PADDING-LEFT: 16.2pt; TEXT-INDENT: -0.1in"> <div>Interest expense</div> </td> <td> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: right"> <div>(516,130</div> </td> <td style="TEXT-ALIGN: left"> <div>)</div> </td> <td> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: right"> <div>(495,891</div> </td> <td style="TEXT-ALIGN: left"> <div>)</div> </td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: white"> <td style="TEXT-ALIGN: left; PADDING-LEFT: 16.2pt; TEXT-INDENT: -0.1in"> <div>Forfeiture of investment fund</div> </td> <td> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: right"> <div>(754,979</div> </td> <td style="TEXT-ALIGN: left"> <div>)</div> </td> <td> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: right"> <div>-</div> </td> <td style="TEXT-ALIGN: left"> <div>&#160;</div> </td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: rgb(204,255,204)"> <td style="PADDING-BOTTOM: 1pt; TEXT-ALIGN: left; PADDING-LEFT: 16.2pt; TEXT-INDENT: -0.1in"> <div>Provision for impairment on investment</div> </td> <td style="PADDING-BOTTOM: 1pt"> <div>&#160;</div> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left"> <div>&#160;</div> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right"> <div>(9,806,150</div> </td> <td style="PADDING-BOTTOM: 1pt; TEXT-ALIGN: left"> <div>)</div> </td> <td style="PADDING-BOTTOM: 1pt"> <div>&#160;</div> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left"> <div>&#160;</div> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right"> <div>-</div> </td> <td style="PADDING-BOTTOM: 1pt; TEXT-ALIGN: left"> <div>&#160;</div> </td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: white"> <td style="PADDING-BOTTOM: 1pt; TEXT-ALIGN: left; PADDING-LEFT: 0.35in; TEXT-INDENT: -0.1in"> <div>Total other expenses</div> </td> <td style="PADDING-BOTTOM: 1pt"> <div>&#160;</div> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left"> <div>&#160;</div> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right"> <div>(11,076,710</div> </td> <td style="PADDING-BOTTOM: 1pt; TEXT-ALIGN: left"> <div>)</div> </td> <td style="PADDING-BOTTOM: 1pt"> <div>&#160;</div> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left"> <div>&#160;</div> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right"> <div>(487,799</div> </td> <td style="PADDING-BOTTOM: 1pt; TEXT-ALIGN: left"> <div>)</div> </td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: rgb(204,255,204)"> <td style="TEXT-ALIGN: left; PADDING-LEFT: 0.1in; TEXT-INDENT: -0.1in"> <div>Loss before income taxes</div> </td> <td> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: right"> <div>(8,945,366</div> </td> <td style="TEXT-ALIGN: left"> <div>)</div> </td> <td> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: right"> <div>(4,345,122</div> </td> <td style="TEXT-ALIGN: left"> <div>)</div> </td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: white"> <td style="PADDING-BOTTOM: 1pt; TEXT-ALIGN: left; PADDING-LEFT: 0.1in; TEXT-INDENT: -0.1in"> <div>Income taxes expenses</div> </td> <td style="PADDING-BOTTOM: 1pt"> <div>&#160;</div> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left"> <div>&#160;</div> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right"> <div>(1,015,950</div> </td> <td style="PADDING-BOTTOM: 1pt; TEXT-ALIGN: left"> <div>)</div> </td> <td style="PADDING-BOTTOM: 1pt"> <div>&#160;</div> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left"> <div>&#160;</div> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right"> <div>(975,688</div> </td> <td style="PADDING-BOTTOM: 1pt; TEXT-ALIGN: left"> <div>)</div> </td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: rgb(204,255,204)"> <td style="PADDING-BOTTOM: 2.5pt; TEXT-ALIGN: left; PADDING-LEFT: 0.1in; TEXT-INDENT: -0.1in"> <div>Net loss</div> </td> <td style="PADDING-BOTTOM: 2.5pt"> <div>&#160;</div> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left"> <div>$</div> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right"> <div>(9,961,316</div> </td> <td style="PADDING-BOTTOM: 2.5pt; TEXT-ALIGN: left"> <div>)</div> </td> <td style="PADDING-BOTTOM: 2.5pt"> <div>&#160;</div> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left"> <div>$</div> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right"> <div>(5,320,810</div> </td> <td style="PADDING-BOTTOM: 2.5pt; TEXT-ALIGN: left"> <div>)</div> </td> </tr> </table> </div> <div style="clear:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt"> &#160;</div> <div style="clear:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px"> The following table shows the condensed cash flows of JYNT for the years ended December 31, 2011 and 2010:</div> <div style="clear:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px"> &#160;</div> <div style="clear:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 0in"> <table style="WIDTH: 100%; BORDER-COLLAPSE: collapse; FONT: 10pt Times New Roman, Times, Serif" cellspacing="0" cellpadding="0"> <tr style="VERTICAL-ALIGN: bottom"> <td style="white-space:nowrap;"> <div>&#160;</div> </td> <td style="white-space:nowrap;"> <div>&#160;</div> </td> <td style="white-space:nowrap; 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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.&#160;&#160;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. 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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, 2011, contained an explanatory paragraph regarding the Company's ability to continue as a going concern.</div> <div style="clear:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt"> &#160;</div> <div style="clear:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;TEXT-ALIGN: justify; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif"> Management plans to continue its efforts to raise additional funds through debt or equity offerings. At the end of March 2012, the Company disposed its operating joint venture of Hubei Chutian to the joint venture partner for a consideration of $59,378,819 (RMB374,140,000). The proceeds will be used for repayment of the debts.</div> <div style="clear:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;TEXT-ALIGN: justify; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif"> &#160;</div> <div style="clear:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;TEXT-ALIGN: justify; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif"> After the disposal of the equity investment in Hubei Chutian and the suspension of business operation of Binzhou Broadcasting, the Company did not have business operations. 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TEXT-ALIGN: left"> <div>&#160;</div> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right"> <div>-</div> </td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt"> <div>&#160;</div> </td> </tr> <tr style="BACKGROUND-COLOR: rgb(204,255,204); VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: justify; PADDING-BOTTOM: 2.5pt"> <div>&#160;</div> </td> <td style="PADDING-BOTTOM: 2.5pt"> <div>&#160;</div> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left"> <div>$</div> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right"> <div>50,378,205</div> </td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt"> <div>&#160;</div> </td> <td style="PADDING-BOTTOM: 2.5pt"> <div>&#160;</div> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left"> <div>$</div> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right"> <div>64,026,705</div> </td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt"> <div>&#160;</div> </td> </tr> </table> <div style="clear:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;TEXT-ALIGN: justify; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif"> &#160;</div> <div style="clear:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;TEXT-ALIGN: justify; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif"> Loan advance represents investment fund contributed to the joint ventures and such advances were unsecured, interest free and repayable on demand. The loan advance to Hubei Chutian will be settled as part of the deal made between JYNT and Hubei SOE in 2012.</div> <div style="clear:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;TEXT-ALIGN: justify; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif"> <b>&#160;</b></div> <div style="clear:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;TEXT-ALIGN: justify; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif"> <b>Binzhou Broadcasting and Television Information Network Co., Ltd</b></div> <div style="clear:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;TEXT-ALIGN: justify; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif"> 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. (&#8220;Binzhou Broadcasting&#8221;) and agreed to acquire 49% equity interest in Binzhou Broadcasting. The principal activity of Binzhou Broadcasting is provision of cable network services. 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.</div> <div style="clear:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;TEXT-ALIGN: justify; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif"> &#160;</div> <div style="clear:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;TEXT-ALIGN: justify; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif"> During the year ended December 31, 2011, Binzhou SOE charged a penalty of $754,979 (RMB5,000,000) against JYNT for the failure of settlement of further capital contribution of $16 million in accordance with the &#8220;Amendment Framework Agreement&#8221;. As a result, the economic benefit percentage of JYNT and Binzhou SOE in Binzhou Broadcasting will be proportionally adjusted to reflect the actual fund provided and the deduction of penalty. Meanwhile, both parties shall negotiate the existence and continued operation of the Binzhou Broadcasting triggered such failure of the obligation of JYNT.</div> <div style="clear:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt"> &#160;</div> <div style="clear:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;TEXT-ALIGN: justify; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif"> </div> <div style="clear:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;TEXT-ALIGN: justify; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif"> In late 2010, the Government of Shandong Province made an announcement for the consolidation of its provincial cable assets in Shandong Province. In accordance with &#8220;Lu Ban Fa&#8221; (2010) No.18, the Province will create a new company namely &#8220;Shandong Broadcasting and Television Network Co., Ltd.&#8221; and required all the cable network companies in Shandong Province to transfer all its assets and revenue to Shandong Broadcasting and Television Network Co., Ltd. Under this government policy, Binzhou Broadcasting is also required to transfer all its assets and revenue to the new company with effective from September 16, 2011. The business operation of Binzhou Broadcasting was suspended since then. All the contractual agreement and the exclusive services agreement made between JYNT, Binzhou SOE and Binzhou Broadcasting were effectively terminated accordingly. The Company is still in the process of negotiation on the compensation of its investments in Binzhou Broadcasting with its joint venture partner, Binzhou SOE. However, the business operation has been transferred to Shandong Broadcasting and Television Network Co., Ltd. since September 16, 2011 although Binzhou Broadcasting still holds all the operating assets.</div> <div style="clear:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;TEXT-ALIGN: justify; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif"> &#160;</div> <div style="clear:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;TEXT-ALIGN: justify; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif"> The Company believes a settlement can be reached with Binzhou SOE and/or Shandong Broadcasting and Television Network Co., Ltd. to receive a compensation for its investment which will be more than its carrying value. However, the settlement of such compensation was uncertain at the reporting date. Therefore, the management decided to make a full provision on its investment cost and loan advances, totalling $9,806,150.</div> <div style="clear:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;TEXT-ALIGN: justify; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif"> &#160;</div> <div style="clear:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;TEXT-ALIGN: justify; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif"> 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 December 31, 2011, 2010 and 2009, the Company was entitled to account for economic benefit shared in Binzhou Broadcasting approximately 26.1%, 27.6% and 27.6% respectively.</div> <div style="clear:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;TEXT-ALIGN: justify; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif"> <b>&#160;</b></div> <div style="clear:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;TEXT-ALIGN: justify; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif"> Summarized financial information of Binzhou Broadcasting as of December 31, 2011, 2010 and 2009 are as follows:</div> <div style="clear:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;TEXT-ALIGN: justify; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif"> &#160;</div> <div style="clear:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;TEXT-ALIGN: justify; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif"> <table style="WIDTH: 100%; BORDER-COLLAPSE: collapse; 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TEXT-ALIGN: center" colspan="2"> <div>&#160;</div> </td> <td style="white-space:nowrap;"> <div>&#160;</div> </td> <td style="white-space:nowrap;"> <div>&#160;</div> </td> <td style="white-space:nowrap; TEXT-ALIGN: center" colspan="2"> <div>&#160;</div> </td> <td style="white-space:nowrap;"> <div>&#160;</div> </td> </tr> <tr style="BACKGROUND-COLOR: rgb(204,255,204); VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: justify; WIDTH: 74%"> <div>Other payables</div> </td> <td style="WIDTH: 1%"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left; WIDTH: 1%"> <div>$</div> </td> <td style="TEXT-ALIGN: right; WIDTH: 10%"> <div>403,598</div> </td> <td style="TEXT-ALIGN: left; WIDTH: 1%"> <div>&#160;</div> </td> <td style="WIDTH: 1%"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left; WIDTH: 1%"> <div>$</div> </td> <td style="TEXT-ALIGN: right; WIDTH: 10%"> <div>28,980</div> </td> <td style="TEXT-ALIGN: left; WIDTH: 1%"> <div>&#160;</div> </td> </tr> <tr style="BACKGROUND-COLOR: white; VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: justify"> <div>Accrued expenses</div> </td> <td> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: right"> <div>335,511</div> </td> <td style="TEXT-ALIGN: left"> <div>&#160;</div> </td> <td> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: right"> <div>385,990</div> </td> <td style="TEXT-ALIGN: left"> <div>&#160;</div> </td> </tr> <tr style="BACKGROUND-COLOR: rgb(204,255,204); 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The Company has agreed with the subscriber not to issue the shares and the money will be refunded back to the subscriber.</div> </div> <table border="0" style="width:100%; table-layout:fixed;" cellspacing="0" cellpadding="0"><tr><td></td></tr></table> <div style="clear:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif "> <table style="MARGIN-TOP: 0px; FONT: 10pt Times New Roman, Times, Serif; MARGIN-BOTTOM: 0px" cellspacing="0" cellpadding="0"> <tr style="TEXT-ALIGN: justify; VERTICAL-ALIGN: top"> <td style="WIDTH: 0in"></td> <td style="TEXT-ALIGN: left; WIDTH: 0.25in"> <div><b>12.</b></div> </td> <td style="TEXT-ALIGN: justify"> <div><b>Promissory note</b></div> </td> </tr> </table> <div style="clear:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;TEXT-ALIGN: justify; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif"> &#160;</div> <div style="clear:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;TEXT-ALIGN: justify; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif"> 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 &#8220;Bridge Financing&#8221;). Each share of Class A preferred stock was converted into one share of the Company&#8217;s ordinary shares in April 2008.&#160; The proceeds from the Bridge Financing were used to fund the acquisition price of Binzhou Broadcasting (Note 4) and for working capital purposes<font style="COLOR: black">. 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&#8217;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.</font></div> <div style="clear:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt"> &#160;</div> <div style="clear:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;TEXT-ALIGN: justify; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif"> 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 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 approximately $11 million in current debt and accrued interest obligations. Each Series A Convertible Preferred Share may be converted, at the option of the shareholder, into one ordinary share.</div> <div style="clear:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;TEXT-ALIGN: justify; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif"> &#160;</div> <div style="clear:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;TEXT-ALIGN: justify; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif"> 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.</div> <div style="clear:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;TEXT-ALIGN: justify; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif"> &#160;</div> <div style="clear:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;TEXT-ALIGN: justify; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif"> 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.</div> <div style="clear:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;TEXT-ALIGN: justify; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif"> &#160;</div> <div style="clear:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;TEXT-ALIGN: justify; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif"> On April 1, 2011, China Cablecom Ltd. issued $27,500 promissory notes bearing interest rate of 8% per annum to promissory note holder. The note was repayable on demand. In the event of default, interest on amounts past due shall be paid at an interest rate of 12% per annum. <font style="COLOR: black">For the year ended December 31, 2011, $1,681 was charged to interest expense.</font></div> <div style="clear:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;TEXT-ALIGN: justify; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif"> &#160;</div> <div style="clear:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;TEXT-ALIGN: justify; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif"> On July 15, 2011, China Cablecom Ltd. issued $389,651 promissory notes due on November 15, 2011 bearing interest rate of 8% per annum to promissory note holder. <font style="COLOR: black">For the year ended December 31, 2011, $16,876 was charged to interest expense. However, the Company was default in payment of the promissory note together with the interest on due date.</font> In the event of default, interest on amounts past due shall be paid at an interest rate of 12% per annum. <font style="COLOR: black">The occurrence of the default shall, at the option of the note holders, make all sum of principal and accrued interest immediately due and payable upon demand.</font></div> <div style="clear:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;TEXT-ALIGN: justify; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif"> &#160;</div> <div style="clear:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;TEXT-ALIGN: justify; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif"> The Company had fully repaid the promissory notes together with accrued interest in September 2013.</div> </div> <table border="0" style="width:100%; table-layout:fixed;" cellspacing="0" cellpadding="0"><tr><td></td></tr></table> <div style="clear:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif "> <table style="MARGIN-TOP: 0px; FONT: 10pt Times New Roman, Times, Serif; MARGIN-BOTTOM: 0px" cellspacing="0" cellpadding="0"> <tr style="TEXT-ALIGN: justify; VERTICAL-ALIGN: top"> <td style="WIDTH: 0in"></td> <td style="TEXT-ALIGN: left; WIDTH: 0.25in"> <div><b>13.</b></div> </td> <td style="TEXT-ALIGN: justify"> <div><b>Convertible notes</b></div> </td> </tr> </table> <div style="clear:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;TEXT-ALIGN: justify; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif"> <b>&#160;</b></div> <div style="clear:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;TEXT-ALIGN: justify; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif"> On May 9, 2008, China Cablecom Holdings, Ltd. issued convertible notes with a principal (&#8220;face&#8221;) value of $43,175,000, along with 1,524,994 shares of ordinary shares (labeled &#8220;incentive shares&#8221; in the agreement) to several investors. The gross proceeds of this transaction were $30,000,000 (&#8220;purchase price&#8221;), 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.</div> <div style="clear:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;TEXT-ALIGN: justify; TEXT-INDENT: 19.8pt; MARGIN: 0pt 0px 0pt 0.55in; FONT: 10pt Times New Roman, Times, Serif"> &#160;</div> <div style="clear:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;TEXT-ALIGN: justify; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif"> 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&#8217; option, into the Company&#8217;s ordinary shares, which have a par value of $0.0005 per share, at a per share conversion price of $9.5.</div> <div style="clear:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt"> &#160;</div> <div style="clear:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;TEXT-ALIGN: justify; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif"> 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.</div> <div style="clear:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;TEXT-ALIGN: justify; TEXT-INDENT: 19.8pt; MARGIN: 0pt 0px 0pt 0.55in; FONT: 10pt Times New Roman, Times, Serif"> &#160;</div> <div style="clear:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;TEXT-ALIGN: justify; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif"> 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. 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Pursuant to Emerging Issues Task Force (&#8220;EITF&#8221;) Issue No.&#160;98-5, &#8220;Accounting for Convertible Securities with Beneficial Conversion Features or Contingently Adjustable Conversion Ratio&#8221; and EITF No.&#160;00-27, &#8220;Application of EITF Issue No.&#160;98-5 to Certain Convertible Instruments&#8221;, 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.</div> <div style="clear:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;TEXT-ALIGN: justify; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif"> &#160;</div> <div style="clear:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;TEXT-ALIGN: justify; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif"> As part of the transaction, cash of 7% of the cash portion of the purchase price was paid as broker&#8217;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.</div> <div style="clear:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;TEXT-ALIGN: justify; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif"> &#160;</div> <div style="clear:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;TEXT-ALIGN: justify; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif"> 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.</div> <div style="clear:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt"> &#160;</div> <div style="clear:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;TEXT-ALIGN: justify; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif"> Due to the default in payment of both principal and interest of promissory notes in April 2009, th<font style="COLOR: black">e Company negotiated with the convertible note holders and completed the debt restructure in October 2009. The Company also entered into a waiver agreement with the consent from all the convertible note holders. T</font>he 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. Each Series A Convertible Preferred Share may be converted, at the option of the shareholder, into one ordinary share.</div> <div style="clear:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;TEXT-ALIGN: justify; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif"> &#160;</div> <div style="clear:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;TEXT-ALIGN: justify; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif"> 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. 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FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif "> <table style="MARGIN-TOP: 0px; FONT: 10pt Times New Roman, Times, Serif; MARGIN-BOTTOM: 0px" cellspacing="0" cellpadding="0"> <tr style="TEXT-ALIGN: justify; VERTICAL-ALIGN: top"> <td style="WIDTH: 0in"></td> <td style="TEXT-ALIGN: left; WIDTH: 0.25in"> <div><b>14.</b></div> </td> <td style="TEXT-ALIGN: justify"> <div><b>Unsecured notes</b></div> </td> </tr> </table> <div style="clear:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;TEXT-ALIGN: justify; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif"> <b>&#160;</b></div> <table style="WIDTH: 100%; BORDER-COLLAPSE: collapse; FONT: 10pt Times New Roman, Times, Serif" cellspacing="0" cellpadding="0"> <tr style="VERTICAL-ALIGN: bottom"> <td style="white-space:nowrap; TEXT-ALIGN: justify"> <div>&#160;</div> </td> <td style="white-space:nowrap; PADDING-BOTTOM: 1pt"> <div>&#160;</div> </td> <td style="white-space:nowrap; BORDER-BOTTOM: black 1pt solid; 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WIDTH: 1%"> <div>&#160;</div> </td> </tr> <tr style="BACKGROUND-COLOR: white; VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: justify; PADDING-BOTTOM: 1pt"> <div>Less: Principal reduction</div> </td> <td style="PADDING-BOTTOM: 1pt"> <div>&#160;</div> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left"> <div>&#160;</div> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right"> <div>-</div> </td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt"> <div>&#160;</div> </td> <td style="PADDING-BOTTOM: 1pt"> <div>&#160;</div> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left"> <div>&#160;</div> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right"> <div>(916,667</div> </td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt"> <div>)</div> </td> </tr> <tr style="BACKGROUND-COLOR: rgb(204,255,204); VERTICAL-ALIGN: bottom"> <td> <div>&#160;</div> </td> <td> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: right"> <div>4,218,128</div> </td> <td style="TEXT-ALIGN: left"> <div>&#160;</div> </td> <td> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: right"> <div>4,218,128</div> </td> <td style="TEXT-ALIGN: left"> <div>&#160;</div> </td> </tr> <tr style="BACKGROUND-COLOR: white; 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TEXT-ALIGN: right"> <div>-</div> </td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt"> <div>&#160;</div> </td> <td style="PADDING-BOTTOM: 2.5pt"> <div>&#160;</div> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left"> <div>$</div> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right"> <div>4,218,128</div> </td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt"> <div>&#160;</div> </td> </tr> </table> <div style="clear:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;TEXT-ALIGN: justify; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif"> <b>&#160;</b></div> <div style="clear:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;TEXT-ALIGN: justify; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif"> 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. With the effective of the reverse share split of the ordinary share at a rate of 1 for 3 on March 1, 2010, three Convertible Preferred Shares can be convertible into one ordinary share. Such change was adopted retrospectively. The repayment was scheduled in 8 installments to be paid every 6 months starting from October 15, 2012.</div> <div style="clear:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;TEXT-ALIGN: justify; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif"> &#160;</div> <div style="clear:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;TEXT-ALIGN: justify; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif"> 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 <font style="COLOR: black">volume weighted average price</font> 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.</div> <div style="clear:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt"> &#160;</div> <div style="clear:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;TEXT-ALIGN: justify; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif"> During the years ended December 31, 2011 and 2010, there were 2,409,301 and 2,566,201 Series A Convertible Preferred Shares converted into ordinary shares, resulting in the reduction of $nil and $210,906 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, 2011 and 2010, totally $528,670 and $240,259 were included in accrued expenses.</div> <div style="clear:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;TEXT-ALIGN: justify; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif"> &#160;</div> <div style="clear:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;TEXT-ALIGN: justify; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif"> The Company was default in payment of interest on due date. In the event of default, interest on amounts past due shall be paid at an interest rate of 15% per annum. 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WIDTH: 1%"> <div>&#160;</div> </td> </tr> <tr style="BACKGROUND-COLOR: white; VERTICAL-ALIGN: bottom"> <td style="TEXT-ALIGN: justify; PADDING-BOTTOM: 1pt"> <div>Less: Principal reduction</div> </td> <td style="PADDING-BOTTOM: 1pt"> <div>&#160;</div> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left"> <div>&#160;</div> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right"> <div>-</div> </td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt"> <div>&#160;</div> </td> <td style="PADDING-BOTTOM: 1pt"> <div>&#160;</div> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left"> <div>&#160;</div> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right"> <div>(903,528</div> </td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 1pt"> <div>)</div> </td> </tr> <tr style="BACKGROUND-COLOR: rgb(204,255,204); VERTICAL-ALIGN: bottom"> <td> <div>&#160;</div> </td> <td> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: right"> <div>16,159,035</div> </td> <td style="TEXT-ALIGN: left"> <div>&#160;</div> </td> <td> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: right"> <div>16,159,035</div> </td> <td style="TEXT-ALIGN: left"> <div>&#160;</div> </td> </tr> <tr style="BACKGROUND-COLOR: white; 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TEXT-ALIGN: right"> <div>-</div> </td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt"> <div>&#160;</div> </td> <td style="PADDING-BOTTOM: 2.5pt"> <div>&#160;</div> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left"> <div>$</div> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right"> <div>16,159,035</div> </td> <td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2.5pt"> <div>&#160;</div> </td> </tr> </table> <div style="clear:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;TEXT-ALIGN: justify; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif"> <b>&#160;</b></div> <div style="clear:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;TEXT-ALIGN: justify; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif"> 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. With the effective of the reverse share split of the ordinary share at a rate of 1 for 3 on March 1, 2010, three Convertible Preferred Shares can be convertible into one ordinary share. Such change was adopted retrospectively. The repayment was scheduled in 7 installments to be paid every 6 months starting from October 15, 2012.</div> <div style="clear:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;TEXT-ALIGN: justify; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif"> &#160;</div> <div style="clear:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;TEXT-ALIGN: justify; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif"> 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 <font style="COLOR: black">volume weighted average price</font> 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. The collaterals of secured notes include all owned and acquired right, title and interest of the Company.</div> <div style="clear:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;TEXT-ALIGN: justify; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif"> <b>&#160;</b></div> <div style="clear:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;TEXT-ALIGN: justify; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif"> During the years ended December 31, 2011 and 2010, there were 2,868,094 and 3,979,984 Series A Convertible Preferred Shares converted into Ordinary Shares, resulting in the reduction of $nil and $903,528 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, 2011 and 2010, totally $2,025,257 and $813,068 were included in accrued expenses. <font style="COLOR: black">The Company was default in payment of interest on due date. In the event of default, interest on amounts past due shall be paid at an interest rate of 15% per annum. The occurrence of the default shall, at the option of the note holders, make all sum of principal and accrued interest immediately due and payable upon demand.</font></div> </div> <table border="0" style="width:100%; table-layout:fixed;" cellspacing="0" cellpadding="0"><tr><td></td></tr></table> <div style="clear:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif "> <table style="MARGIN-TOP: 0px; FONT: 10pt Times New Roman, Times, Serif; MARGIN-BOTTOM: 0px" cellspacing="0" cellpadding="0"> <tr style="TEXT-ALIGN: justify; VERTICAL-ALIGN: top"> <td style="WIDTH: 0in"></td> <td style="TEXT-ALIGN: left; WIDTH: 0.25in"> <div><strong>16.</strong></div> </td> <td style="TEXT-ALIGN: justify"> <div><strong>Senior secured notes</strong></div> </td> </tr> </table> <div style="clear:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;TEXT-ALIGN: justify; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif"> <strong>&#160;</strong></div> <div style="clear:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;TEXT-ALIGN: justify; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif"> On October 9, 2009, the Company completed a private placement of $33 million Senior Secured Notes (&#8220;New Notes&#8221;) 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&#8217;s ordinary shares. With the effective of the reverse share split of the ordinary share at a rate of 1 for 3 on March 1, 2010, three Convertible Preferred Shares can be convertible into one ordinary share. Such change was adopted retrospectively. The net proceeds from the issuance will be used to satisfy the Company&#8217;s remaining obligations to the Hubei SOE under its supplementary framework agreement.</div> <div style="clear:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;TEXT-ALIGN: justify; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif"> &#160;</div> <div style="clear:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;TEXT-ALIGN: justify; MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif"> 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. 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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 Statements of Income and the Statements of Equity.</div> <div style="clear:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px"> &#160;</div> <div style="clear:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px"> <b>Off-balance Sheet Arrangements</b></div> <div style="clear:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px"> The Company does not have any off-balance sheet arrangements as of December 31, 2011 and 2010.</div> <div style="clear:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px"> <b>&#160;</b></div> <div style="clear:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px"> <b>Revenue Recognition</b></div> <div style="clear:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px"> The Company recognizes revenue based on the following:</div> <div style="clear:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px"> &#160;</div> <div style="clear:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px"> Cable Network Revenue &#150;The Company recognizes revenue from the basic analog and digital cable subscription services, referred to as subscription services, over our cable network to customers in the period the related services are provided. 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Costs related to connections and reconnections are recognized in the consolidated statement of operations as incurred.</div> <div style="clear:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px"> &#160;</div> <div style="clear:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px"> Fiber cable rental income &#150; Fiber cable rental income represents the income received from customers for use of the Company&#8217;s fiber cable network and is recognized as revenue on a pro-rata basis over the contracted service period.</div> <div style="clear:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px"> &#160;</div> <div style="clear:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px"> <b>Employee Benefits</b></div> <div style="clear:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px"> 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.</div> <div style="clear:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px"> &#160;</div> <div style="clear:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px"> <b>Income Taxes</b></div> <div style="clear:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px"> 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.&#160;</div> <div style="clear:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px"> &#160;</div> <div style="clear:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px"> 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.&#160; 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.&#160; 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.</div> <div style="clear:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt"> &#160;</div> <div style="clear:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px"> 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.</div> <div style="clear:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px 0pt 0.65pt"> <b>&#160;</b></div> <div style="clear:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px"> <b>Foreign Currency Translation</b></div> <div style="clear:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px"> The Company&#8217;s functional currency is the Renminbi (&#8220;RMB&#8221;). 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&#8217; 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.</div> <div style="clear:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px 0pt 0.65pt"> <b>&#160;</b></div> <div style="clear:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px"> Translation of amounts from RMB into United States dollars (&#8220;US$&#8221;) has been made at the following exchange rates for the respective periods:</div> <div style="clear:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px"> &#160;</div> <div style="clear:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px"> <table style="BORDER-COLLAPSE: collapse; FONT: 10pt Times New Roman, Times, Serif; WIDTH: 65%" cellspacing="0" cellpadding="0"> <tr style="BACKGROUND-COLOR: rgb(204,255,204)"> <td style="VERTICAL-ALIGN: bottom; WIDTH: 67%"> <div>December 31, 2011</div> </td> <td style="VERTICAL-ALIGN: top; TEXT-ALIGN: right; WIDTH: 3%"> <div>&#160;</div> </td> <td style="VERTICAL-ALIGN: bottom; WIDTH: 30%"> <div>&#160;</div> </td> </tr> <tr style="BACKGROUND-COLOR: white"> <td style="VERTICAL-ALIGN: bottom"> <div>Balance sheet</div> </td> <td style="VERTICAL-ALIGN: top; TEXT-ALIGN: right"> <div>&#160;</div> </td> <td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: right"> <div>RMB6.3009 to US$1.00</div> </td> </tr> <tr style="BACKGROUND-COLOR: rgb(204,255,204)"> <td style="VERTICAL-ALIGN: bottom"> <div>Statement of operations and comprehensive loss</div> </td> <td style="VERTICAL-ALIGN: top; TEXT-ALIGN: right"> <div>&#160;</div> </td> <td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: right"> <div>RMB6.4618 &#160;to US$1.00</div> </td> </tr> <tr style="BACKGROUND-COLOR: white"> <td style="VERTICAL-ALIGN: bottom"> <div>&#160;</div> </td> <td style="VERTICAL-ALIGN: top; TEXT-ALIGN: right"> <div>&#160;</div> </td> <td style="VERTICAL-ALIGN: bottom"> <div>&#160;</div> </td> </tr> <tr style="BACKGROUND-COLOR: rgb(204,255,204)"> <td style="VERTICAL-ALIGN: bottom"> <div>December 31, 2010</div> </td> <td style="VERTICAL-ALIGN: top; TEXT-ALIGN: right"> <div>&#160;</div> </td> <td style="VERTICAL-ALIGN: bottom"> <div>&#160;</div> </td> </tr> <tr style="BACKGROUND-COLOR: white"> <td style="VERTICAL-ALIGN: bottom"> <div>Balance sheet</div> </td> <td style="VERTICAL-ALIGN: top; TEXT-ALIGN: right"> <div>&#160;</div> </td> <td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: right"> <div>RMB6.6227 to US$1.00</div> </td> </tr> <tr style="BACKGROUND-COLOR: rgb(204,255,204)"> <td style="VERTICAL-ALIGN: bottom"> <div>Statement of operations and comprehensive loss</div> </td> <td style="VERTICAL-ALIGN: top; TEXT-ALIGN: right"> <div>&#160;</div> </td> <td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: right"> <div>RMB6.72565 &#160;to US$1.00</div> </td> </tr> </table> </div> </div> <table border="0" style="width:100%; table-layout:fixed;" cellspacing="0" cellpadding="0"><tr><td></td></tr></table> <div style="clear:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif "> <strong>3. Recent Changes in Accounting Standards</strong></div> <div style="clear:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px"> &#160;</div> <div style="clear:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px"> 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.</div> <div style="clear:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px"> &#160;</div> <div style="clear:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px"> 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&#8217;s financial condition or results of operations.</div> <div style="clear:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px"> &#160;</div> <div style="clear:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px"> In February 2010, the FASB issued Accounting Standards Update 2010-09 &#8220;Subsequent Events (Topic 855)&#8221; 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&#8217;s financial statements.</div> <div style="clear:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt"> &#160;</div> <div style="clear:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px"> In May 2011, the FASB issued amendments to ASC 820 &#8220;Fair Value Measurements and Disclosures.&#8221;&#160;&#160;Some of the amendments clarify the FASB&#8217;s intent about the application of existing fair value measurement requirements and others change a particular principle or requirement for measuring fair value or for disclosing information about fair value measurements.&#160;&#160;This guidance is effective during interim and annual periods beginning after December 15, 2011 and is to be applied on a prospective basis. 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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.</div> <div style="clear:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px"> &#160;</div> <div style="clear:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px"> At December 31, 2011, the buildings and motor vehicles approximately of $8,215,481 and $718,092 respectively, were still in the process of applying the title certificates.</div> <div style="clear:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px"> &#160;</div> <div style="clear:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px"> Fiber infrastructure and electric appliances with net carrying amount of $8,980,056 was leased from leasing company under the sales and leaseback arrangement.</div> <div style="clear:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px"> &#160;</div> <div style="clear:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px"> Depreciation for the year ended December 31, 2011 was $14,633,191 of which $13,739,233 was charged to cost of revenue and $893,958 was charged to general and administrative expenses.</div> <div style="clear:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px; TEXT-INDENT: 0.05pt"> &#160;</div> <div style="clear:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px"> Depreciation for the year ended December 31, 2010 was $15,426,966 of which $14,543,770 was charged to cost of revenue and $883,196 was charged to general and administrative expenses.</div> <div style="clear:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px"> &#160;</div> <div style="clear:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px"> For the year ended December 31, 2011, the Company has written off part of property, plant and equipment amounting to $362,901, which was included in other expense.</div> </div> <table border="0" style="width:100%; table-layout:fixed;" cellspacing="0" cellpadding="0"><tr><td></td></tr></table> <div style="clear:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif "> <strong>9. 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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. 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MARGIN: 0pt 0px"> As of December 31, 2011 and 2010, 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, 2011 and 2010, the Company has not recognized any amount of interest and penalties related to uncertain tax positions. 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Other Current Liabilities</strong></div> <div style="clear:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px"> &#160;</div> <div style="clear:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px"> Other current liabilities consist of the following:</div> <div style="clear:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px"> &#160;</div> <table style="WIDTH: 100%; BORDER-COLLAPSE: collapse; FONT: 10pt Times New Roman, Times, Serif" cellspacing="0" cellpadding="0"> <tr style="VERTICAL-ALIGN: bottom"> <td style="white-space:nowrap;"> <div>&#160;</div> </td> <td style="white-space:nowrap; PADDING-BOTTOM: 1pt"> <div>&#160;</div> </td> <td style="white-space:nowrap; BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center" colspan="2"> <div>December 31, 2011</div> </td> <td style="white-space:nowrap; PADDING-BOTTOM: 1pt"> <div>&#160;</div> </td> <td style="white-space:nowrap; PADDING-BOTTOM: 1pt"> <div>&#160;</div> </td> <td style="white-space:nowrap; BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center" colspan="2"> <div>December 31, 2010</div> </td> <td style="white-space:nowrap; PADDING-BOTTOM: 1pt"> <div>&#160;</div> </td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: white"> <td style="TEXT-ALIGN: justify"> <div>&#160;</div> </td> <td> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: right"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left"> <div>&#160;</div> </td> <td> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: right"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left"> <div>&#160;</div> </td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: rgb(204,255,204)"> <td style="WIDTH: 70%; TEXT-ALIGN: justify"> <div>Other payable</div> </td> <td style="WIDTH: 1%"> <div>&#160;</div> </td> <td style="WIDTH: 1%; 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TEXT-ALIGN: justify; PADDING-LEFT: 1.4pt"> <div>&#160;</div> </td> <td style="FONT-SIZE: 10pt"> <div>&#160;</div> </td> <td style="FONT-SIZE: 10pt; TEXT-ALIGN: left"> <div>&#160;</div> </td> <td style="FONT-SIZE: 10pt; TEXT-ALIGN: right"> <div>&#160;</div> </td> <td style="FONT-SIZE: 10pt; TEXT-ALIGN: left"> <div>&#160;</div> </td> <td style="FONT-SIZE: 10pt"> <div>&#160;</div> </td> <td style="FONT-SIZE: 10pt; TEXT-ALIGN: left"> <div>&#160;</div> </td> <td style="FONT-SIZE: 10pt; TEXT-ALIGN: right"> <div>&#160;</div> </td> <td style="FONT-SIZE: 10pt; TEXT-ALIGN: left"> <div>&#160;</div> </td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: rgb(204,255,204)"> <td style="PADDING-BOTTOM: 1pt; TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; PADDING-LEFT: 1.4pt"> <div>Less: repayable within one year classified as current<br/> liabilities</div> </td> <td style="PADDING-BOTTOM: 1pt; FONT: 10pt Times New Roman, Times, Serif"> <div>&#160;</div> </td> <td style="BORDER-BOTTOM: black 1pt solid; 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FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px"> The loan advance from Hubei SOE was used for funding the daily business operations. The loan was unsecured, interest charged ranging from 6.43% - 6.77% per annum and repayable in 12 or 16 quarterly instalments within three or four years.</div> <div style="clear:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px"> &#160;</div> <div style="clear:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px"> During the year ended December 31, 2011 and 2010, the interest charged regarding the loan advanced from Hubei SOE was $1,097,228 and $638,160, respectively.</div> <div style="clear:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px"> &#160;</div> <div style="clear:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px"> Below is the schedule of loan repayment:</div> <div style="clear:both; 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TEXT-ALIGN: right"> <div>3,017,677</div> </td> <td style="FONT-SIZE: 10pt; PADDING-BOTTOM: 1pt; TEXT-ALIGN: left"> <div>&#160;</div> </td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: white"> <td style="FONT-SIZE: 10pt; WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2.5pt; TEXT-ALIGN: left"> <div>&#160;</div> </td> <td style="FONT-SIZE: 10pt; WIDTH: 47%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2.5pt; TEXT-ALIGN: left"> <div>&#160;</div> </td> <td style="FONT-SIZE: 10pt; WIDTH: 1%; PADDING-BOTTOM: 2.5pt; TEXT-ALIGN: left"> <div>&#160;</div> </td> <td style="FONT-SIZE: 10pt; WIDTH: 39%; PADDING-BOTTOM: 2.5pt"> <div>&#160;</div> </td> <td style="FONT-SIZE: 10pt; WIDTH: 1%; BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left"> <div>$</div> </td> <td style="FONT-SIZE: 10pt; WIDTH: 10%; BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right"> <div>15,277,892</div> </td> <td style="FONT-SIZE: 10pt; WIDTH: 1%; PADDING-BOTTOM: 2.5pt; TEXT-ALIGN: left"> </td> </tr> </table> </div> <table border="0" style="width:100%; 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For the years ended December 31, 2011 and 2010, no statutory reserves are contributed by the Company because the Company incurred a significant loss.</div> <table border="0" style="width:100%; table-layout:fixed;" cellspacing="0" cellpadding="0"><tr><td></td></tr></table> <div style="clear:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif "> <strong>17. 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PADDING-BOTTOM: 1pt; PADDING-LEFT: 1.05pt"></td> <td style="white-space:nowrap; PADDING-BOTTOM: 1pt"> <div>&#160;</div> </td> <td style="white-space:nowrap; BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left"> <div>&#160;</div> </td> <td style="white-space:nowrap; BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center"> <div>Capital Leases</div> </td> <td style="white-space:nowrap; PADDING-BOTTOM: 1pt; TEXT-ALIGN: left"> <div>&#160;</div> </td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: rgb(204,255,204)"> <td style="PADDING-LEFT: 1.05pt"> <div>Year ending December 31,</div> </td> <td> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: center"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left"> <div>&#160;</div> </td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: white"> <td style="WIDTH: 85%; TEXT-ALIGN: left; PADDING-LEFT: 1.05pt"> <div>2012</div> </td> <td style="WIDTH: 1%"> <div>&#160;</div> </td> <td style="WIDTH: 1%; 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TEXT-ALIGN: right"> <div>1,034,343</div> </td> <td style="PADDING-BOTTOM: 1pt; TEXT-ALIGN: left"> <div>&#160;</div> </td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: white"> <td style="TEXT-ALIGN: left; PADDING-LEFT: 1.05pt"> <div>&#160;</div> </td> <td> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: right"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left"> <div>&#160;</div> </td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: rgb(204,255,204)"> <td style="TEXT-ALIGN: left; PADDING-LEFT: 1.05pt"> <div>Present value of minimum capital lease payments</div> </td> <td> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: right"> <div>7,935,374</div> </td> <td style="TEXT-ALIGN: left"> <div>&#160;</div> </td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: white"> <td style="PADDING-BOTTOM: 1pt; TEXT-ALIGN: left; PADDING-LEFT: 1.05pt"> <div>Less: obligations under capital leases, current portion</div> </td> <td style="PADDING-BOTTOM: 1pt"> <div>&#160;</div> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: left"> <div>&#160;</div> </td> <td style="BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: right"> <div>3,026,297</div> </td> <td style="PADDING-BOTTOM: 1pt; TEXT-ALIGN: left"> <div>&#160;</div> </td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: rgb(204,255,204)"> <td style="TEXT-ALIGN: left; PADDING-LEFT: 1.05pt"> <div>&#160;</div> </td> <td> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: right"> <div>&#160;</div> </td> <td style="TEXT-ALIGN: left"> <div>&#160;</div> </td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: white"> <td style="PADDING-BOTTOM: 2.5pt; TEXT-ALIGN: left; PADDING-LEFT: 1.05pt"> <div>Obligations under capital leases less current portion</div> </td> <td style="PADDING-BOTTOM: 2.5pt"> <div>&#160;</div> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left"> <div>$</div> </td> <td style="BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right"> <div>4,909,077</div> </td> <td style="PADDING-BOTTOM: 2.5pt; 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Commitments and Contingencies</strong></div> <div style="clear:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px"> &#160;</div> <div style="clear:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px"> 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&#8217;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&#8217;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.</div> <div style="clear:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px"> &#160;</div> <div style="clear:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px"> 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&#8217;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.</div> <table border="0" style="width:100%; table-layout:fixed;" cellspacing="0" cellpadding="0"><tr><td></td></tr></table> <div style="clear:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif "> <strong>21. Operating Risk</strong></div> <div style="clear:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px"> &#160;</div> <div style="clear:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px"> <strong>Concentrations of credit risk</strong></div> <div style="clear:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px"> Financial instruments that potentially subject the Company to significant concentrations of credit risk primarily consist of cash and cash equivalents, accounts and other receivable. As of December 31, 2011 and 2010, all of the Company&#8217;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&#8217; interests. For accounts and other receivable, the Company performs ongoing credit evaluations of its customers&#8217; financial condition and historically has not experienced any significant collectability problem.</div> <div style="clear:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px 0pt 21.25pt"> &#160;</div> <div style="clear:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px"> <strong>Foreign exchange risk</strong></div> <div style="clear:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px"> Substantially all of the Company&#8217;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&#8217;s Bank of China or other banks authorized to buy and sell foreign currencies at the exchange rates quoted by the People&#8217;s Bank of China.</div> <div style="clear:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px"> <strong>&#160;</strong></div> <div style="clear:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px"> <strong>Business operations are substantially in foreign countries</strong></div> <div style="clear:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px"> All of the Company&#8217;s operations and assets are located in the PRC. Accordingly, the Company&#8217;s operations are subject to various political, economic, and other risks and uncertainties inherent in the PRC. The Company&#8217;s operations are subject to the risks of restrictions on transfer of funds; tax policies; foreign exchange restrictions; and political conditions and governmental policies.</div> <table border="0" style="width:100%; table-layout:fixed;" cellspacing="0" cellpadding="0"><tr><td></td></tr></table> <div style="clear:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif "> <strong>22. Subsequent Event</strong></div> <div style="clear:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px"> &#160;</div> <div style="clear:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px"> On January 10, 2012, the Company entered into a sale and leaseback arrangement from a financial leasing company for a lease loan of $7,935,374 (RMB50,000,000).</div> <table border="0" style="width:100%; table-layout:fixed;" cellspacing="0" cellpadding="0"><tr><td></td></tr></table> <div style="clear:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif "> <strong>18. Registered Capital</strong></div> <div style="clear:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px"> &#160;</div> <table style="WIDTH: 100%; BORDER-COLLAPSE: collapse; FONT: 10pt Times New Roman, Times, Serif" cellspacing="0" cellpadding="0"> <tr style="VERTICAL-ALIGN: bottom"> <td style="white-space:nowrap;"> <div>&#160;</div> </td> <td style="white-space:nowrap; PADDING-BOTTOM: 1pt"> <div>&#160;</div> </td> <td style="white-space:nowrap; BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center" colspan="2"> <div>December 31, 2011</div> </td> <td style="white-space:nowrap; PADDING-BOTTOM: 1pt"> <div>&#160;</div> </td> <td style="white-space:nowrap; PADDING-BOTTOM: 1pt"> <div>&#160;</div> </td> <td style="white-space:nowrap; BORDER-BOTTOM: black 1pt solid; TEXT-ALIGN: center" colspan="2"> <div>December 31, 2010</div> </td> <td style="white-space:nowrap; PADDING-BOTTOM: 1pt"> <div>&#160;</div> </td> </tr> <tr style="VERTICAL-ALIGN: bottom"> <td style="white-space:nowrap;"> <div>&#160;</div> </td> <td style="white-space:nowrap;"> <div>&#160;</div> </td> <td style="white-space:nowrap; TEXT-ALIGN: center" colspan="2"> <div>&#160;</div> </td> <td style="white-space:nowrap;"> <div>&#160;</div> </td> <td style="white-space:nowrap;"> <div>&#160;</div> </td> <td style="white-space:nowrap; TEXT-ALIGN: center" colspan="2"> <div>&#160;</div> </td> <td style="white-space:nowrap;"> <div>&#160;</div> </td> </tr> <tr style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: rgb(204,255,204)"> <td style="WIDTH: 70%; PADDING-BOTTOM: 2.5pt; TEXT-ALIGN: justify"> <div>Registered capital</div> </td> <td style="WIDTH: 1%; PADDING-BOTTOM: 2.5pt"> <div>&#160;</div> </td> <td style="WIDTH: 1%; BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left"> <div>$</div> </td> <td style="WIDTH: 12%; BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right"> <div>15,005,484</div> </td> <td style="WIDTH: 1%; PADDING-BOTTOM: 2.5pt; TEXT-ALIGN: left"> <div>&#160;</div> </td> <td style="WIDTH: 1%; PADDING-BOTTOM: 2.5pt"> <div>&#160;</div> </td> <td style="WIDTH: 1%; BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: left"> <div>$</div> </td> <td style="WIDTH: 12%; BORDER-BOTTOM: black 2.5pt double; TEXT-ALIGN: right"> <div>15,005,484</div> </td> <td style="WIDTH: 1%; PADDING-BOTTOM: 2.5pt; TEXT-ALIGN: left"> <div>&#160;</div> </td> </tr> </table> <div style="clear:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px"> &#160;</div> <div style="clear:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px"> 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).</div> <table border="0" style="width:100%; table-layout:fixed;" cellspacing="0" cellpadding="0"><tr><td></td></tr></table> <div style="clear:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif "> <strong>19. Employee Benefits</strong></div> <div style="clear:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px"> &#160;</div> <div style="clear:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;TEXT-ALIGN: justify; FONT: 10pt Times New Roman, Times, Serif; MARGIN: 0pt 0px"> 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 makes contributions totalled $3,096,431 and $2,358,483 for the years ended December 31, 2011 and 2010, respectively.</div> <table border="0" style="width:100%; table-layout:fixed;" cellspacing="0" cellpadding="0"><tr><td></td></tr></table> EX-101.SCH 6 cablf-20111231.xsd XBRL TAXONOMY EXTENSION SCHEMA 101 - Document - Document And Entity Information link:presentationLink link:definitionLink link:calculationLink 102 - Statement - CONSOLIDATED BALANCE SHEETS link:presentationLink link:definitionLink link:calculationLink 103 - Statement - CONSOLIDATED BALANCE SHEETS [Paranthetical] link:presentationLink link:definitionLink link:calculationLink 104 - Statement - CONSOLIDATED STATEMENTS OF OPERATIONS link:presentationLink link:definitionLink link:calculationLink 105 - Statement - CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS link:presentationLink link:definitionLink link:calculationLink 106 - Statement - CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY link:presentationLink link:definitionLink link:calculationLink 107 - 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Investment in operating joint venture
12 Months Ended
Dec. 31, 2011
Equity Method Investments and Joint Ventures [Abstract]  
Equity Method Investments and Joint Ventures Disclosure [Text Block]
9.
Investment in operating joint venture
 
 
 
December 31, 2011
 
 
December 31, 2010
 
 
 
 
 
 
 
 
Unlisted equity investment, at cost
 
$
8,138,675
 
 
$
8,138,675
 
Share of loss and other comprehensive income, net of dividend received
 
 
(12,946,118
)
 
 
(9,858,747
)
Loan advances
 
 
65,746,777
 
 
 
65,746,777
 
 
 
$
60,939,334
 
 
$
64,026,705
 
Less: Forfeiture of investment fund
 
 
(754,979
)
 
 
-
 
Provision for impairment on investment
 
 
(9,806,150
)
 
 
-
 
 
 
$
50,378,205
 
 
$
64,026,705
 
 
Loan advance represents investment fund contributed to the joint ventures and such advances were unsecured, interest free and repayable on demand. The loan advance to Hubei Chutian will be settled as part of the deal made between JYNT and Hubei SOE in 2012.
 
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. The principal activity of Binzhou Broadcasting is provision of cable network services. 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.
 
During the year ended December 31, 2011, Binzhou SOE charged a penalty of $754,979 (RMB5,000,000) against JYNT for the failure of settlement of further capital contribution of $16 million in accordance with the “Amendment Framework Agreement”. As a result, the economic benefit percentage of JYNT and Binzhou SOE in Binzhou Broadcasting will be proportionally adjusted to reflect the actual fund provided and the deduction of penalty. Meanwhile, both parties shall negotiate the existence and continued operation of the Binzhou Broadcasting triggered such failure of the obligation of JYNT.
 
In late 2010, the Government of Shandong Province made an announcement for the consolidation of its provincial cable assets in Shandong Province. In accordance with “Lu Ban Fa” (2010) No.18, the Province will create a new company namely “Shandong Broadcasting and Television Network Co., Ltd.” and required all the cable network companies in Shandong Province to transfer all its assets and revenue to Shandong Broadcasting and Television Network Co., Ltd. Under this government policy, Binzhou Broadcasting is also required to transfer all its assets and revenue to the new company with effective from September 16, 2011. The business operation of Binzhou Broadcasting was suspended since then. All the contractual agreement and the exclusive services agreement made between JYNT, Binzhou SOE and Binzhou Broadcasting were effectively terminated accordingly. The Company is still in the process of negotiation on the compensation of its investments in Binzhou Broadcasting with its joint venture partner, Binzhou SOE. However, the business operation has been transferred to Shandong Broadcasting and Television Network Co., Ltd. since September 16, 2011 although Binzhou Broadcasting still holds all the operating assets.
 
The Company believes a settlement can be reached with Binzhou SOE and/or Shandong Broadcasting and Television Network Co., Ltd. to receive a compensation for its investment which will be more than its carrying value. However, the settlement of such compensation was uncertain at the reporting date. Therefore, the management decided to make a full provision on its investment cost and loan advances, totalling $9,806,150.
 
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 December 31, 2011, 2010 and 2009, the Company was entitled to account for economic benefit shared in Binzhou Broadcasting approximately 26.1%, 27.6% and 27.6% respectively.
 
Summarized financial information of Binzhou Broadcasting as of December 31, 2011, 2010 and 2009 are as follows:
 
 
 
December 31, 2011
 
 
December 31, 2010
 
 
December 31, 2009
 
Current assets
 
$
7,469,066
 
 
$
6,857,696
 
 
$
10,898,559
 
Non-current assets
 
 
22,938,539
 
 
 
23,296,427
 
 
 
35,969,589
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total assets
 
$
30,407,605
 
 
$
30,154,123
 
 
$
46,868,148
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Current liabilities
 
$
8,627,276
 
 
$
8,667,530
 
 
$
14,999,170
 
Non-current liabilities
 
 
33,309,527
 
 
 
32,445,981
 
 
 
31,469,494
 
Shareholders' equity
 
 
(11,529,198
)
 
 
(10,959,388
)
 
 
399,484
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total liabilities and shareholders' equity
 
$
30,407,605
 
 
$
30,154,123
 
 
$
46,868,148
 
 
Summarized financial information of Binzhou Broadcasting for the years ended December 31, 2011, 2010 and 2009 are as follows:
 
 
 
For the year ended
December 31, 2011
 
 
For the year ended
December 31, 2010
 
 
For the year ended
December 31, 2009
 
 
 
 
 
 
 
 
 
 
 
Net sales
 
$
11,868,256
 
 
$
11,531,348
 
 
$
10,659,255
 
Gross profit
 
 
2,887,330
 
 
 
1,797,134
 
 
 
4,439,962
 
Loss before taxes
 
 
(381,769
)
 
 
(11,350,894
)
 
 
(438,850
)
Net loss
 
 
(708,137
)
 
 
(11,459,687
)
 
 
(606,310
)
 
 
 
 
 
 
 
 
 
 
 
 
 
Company's share of net loss
 
 
(185,102
)
 
 
(3,167,830
)
 
 
(167,604
)
 
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 2011, 2010 and 2009, the Company was entitled to account for economic benefit shared in Hubei Chutian approximately 49%, 49% and 49% respectively.
 
On October 20, 2011, JYNT was approached by the joint venture partner, Hubei SOE, regarding the purchase of the assets and equity interest in Hubei Chutian. The parties entered into a Termination Agreement on March 22, 2012 and an Equity Transfer Agreement on June 15, 2012, pursuant to which the parties agreed to consideration of $59,378,819 (RMB374,140,000) for the purchase by Hubei SOE of the assets and equity interest in Hubei Chutian. JYNT agreed to transfer back all 49% equity interest of Hubei Chutian to Hubei SOE and to terminate the joint venture contractual agreement, technical services agreement and loan agreement with Hubei Chutian and Hubei SOE respectively. The estimated gain of disposal of Hubei Chutian was $9 million. As a result, Hubei Chutian was no longer the operating joint venture of JYNT since then.
 
Summarized financial information of Hubei Chutian as of December 31, 2011, 2010 and 2009 are as follows:
 
 
 
December 31, 2011
 
 
December 31, 2010
 
 
December 31, 2009
 
Current assets
 
$
20,649,208
 
 
$
27,036,924
 
 
$
27,935,512
 
Non-current assets
 
 
140,869,643
 
 
 
123,057,934
 
 
 
111,486,716
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total assets
 
$
161,518,851
 
 
$
150,094,858
 
 
$
139,422,228
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Current liabilities
 
$
64,935,117
 
 
$
56,980,813
 
 
$
42,467,440
 
Non-current liabilities
 
 
101,369,890
 
 
 
91,944,551
 
 
 
96,459,328
 
Shareholders' equity
 
 
(4,786,156
)
 
 
1,169,494
 
 
 
495,460
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total liabilities and owners' equity
 
$
161,518,851
 
 
$
150,094,858
 
 
$
139,422,228
 
 
Summarized financial information of Hubei Chutian for the years ended December 31, 2011, 2010 and 2009 are as follows:
 
 
 
For the year ended
 
 
For the year ended
 
 
For the year ended
 
 
 
December 31, 2011
 
 
December 31, 2010
 
 
December 31, 2009
 
 
 
 
 
 
 
 
 
 
 
Net sales
 
$
49,914,297
 
 
$
42,431,792
 
 
$
34,904,026
 
Gross profit
 
 
16,894,646
 
 
 
12,151,561
 
 
 
11,256,097
 
Loss before taxes
 
 
(4,618,169
)
 
 
(10,852,867
)
 
 
(1,749,897
)
Net loss
 
 
(4,618,169
)
 
 
(10,367,435
)
 
 
(2,153,983
)
 
 
 
 
 
 
 
 
 
 
 
 
 
Company's share of net loss
 
 
(2,262,903
)
 
 
(5,080,043
)
 
 
(1,055,451
)
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CONSOLIDATED STATEMENTS OF OPERATIONS (USD $)
12 Months Ended
Dec. 31, 2011
Dec. 31, 2010
Dec. 31, 2009
Management fee income $ 4,632,022 $ 4,450,438 $ 1,004,596
Share of loss on operating joint ventures (2,448,005) (8,247,873) (1,223,055)
Gross profit 2,184,017 (3,797,435) (218,459)
Operating expenses      
General and administrative expenses 4,705,283 5,450,965 4,966,132
Total operating expenses 4,705,283 5,450,965 4,966,132
Loss from operations (2,521,266) (9,248,400) (5,184,591)
Other income / (expenses)      
Interest income 945 10,566 61,651
Interest expense (6,639,531) (4,211,707) (9,855,474)
Forfeiture of investment fund (754,979) 0 0
Provision for impairment on investment (9,806,150) 0 0
Loss on debt extinguishment 0 0 (39,663,466)
Other income 0 17,566 3,456
Total other (expenses)/ income (17,199,715) (4,183,575) (49,453,833)
Loss before income taxes (19,720,981) (13,431,975) (54,638,424)
Income taxes expenses (1,015,951) (975,712) (230,567)
Net loss (20,736,932) (14,407,687) (54,868,991)
Net loss per ordinary share      
- Basic and fully diluted (in dollars per share) $ (1.57) $ (1.97) $ (16.18)
Weighted average number of shares      
- Basic and fully diluted (in shares) 13,244,284 7,327,475 3,391,924
HUBEI CHUTIAN VIDEO COMMUNICATION NETWORK CO., LTD. [Member]
     
Revenues 49,914,297 42,431,792  
Cost of revenue 33,019,651 30,280,231  
Gross profit 16,894,646 12,151,561  
Operating expenses      
Impairment of intangible assets 0 4,359,571  
Amortization expenses 800,386 1,309,706  
General and administrative expenses 20,076,451 17,711,532  
Total operating expenses 20,876,837 23,380,809  
Loss from operations (3,982,191) (11,229,248)  
Other income / (expenses)      
Interest income 562,848 561,047  
Interest expense (1,111,388) (693,369)  
Other income 518,481 629,609  
Other expenses (605,919) (120,906)  
Total other (expenses)/ income (635,978) 376,381  
Loss before income taxes (4,618,169) (10,852,867)  
Income taxes expenses 0 485,432  
Net loss $ (4,618,169) $ (10,367,435)  
XML 14 R10.htm IDEA: XBRL DOCUMENT v2.4.0.8
Recent Changes in Accounting Standards
12 Months Ended
Dec. 31, 2011
New Accounting Pronouncements and Changes in Accounting Principles [Text Block]
3.
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.
 
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.
 
In May 2011, the FASB issued amendments to ASC 820 “Fair Value Measurements and Disclosures.”  Some of the amendments clarify the FASB’s intent about the application of existing fair value measurement requirements and others change a particular principle or requirement for measuring fair value or for disclosing information about fair value measurements.  This guidance is effective during interim and annual periods beginning after December 15, 2011 and is to be applied on a prospective basis. The implementation of this guidance will not have a material impact on its consolidated financial statements.
 
In June 2011, the FASB issued updated guidance to ASC 220 “Comprehensive Income” which allows entities to present the total of comprehensive income, the components of net income, and the components of other comprehensive income either in a single continuous statement of comprehensive income or in two separate but consecutive statements.  This guidance, which is to be applied retrospectively, is effective for fiscal years, and interim periods within those years, beginning after December 15, 2011.  The implementation of this guidance will not have an impact on its consolidated financial statements.
 
In September 2011, the FASB issued amendments to ASC 350 “Intangibles-Goodwill and Other” which allow an entity to assess qualitatively whether it is necessary to perform the current two-step goodwill impairment test.  Performance of the two-step impairment test is required only if an entity determines it is more-likely-than-not that a reporting unit's fair value is less than its carrying amount.  Otherwise, no further testing is required.  This guidance is effective for annual and interim goodwill tests performed for fiscal years beginning after December 15, 2011; however, early adoption is permitted.  The Company expects that the implementation of this guidance will not have a material impact on its consolidated financial statements.
 
In December 2011, the FASB issued amendments to the disclosure requirements on offsetting in ASC 210 “Balance Sheet” which require an entity to disclose quantitative information about offsetting and related arrangements to enable users of its financial statements to understand the effect of those arrangements on its financial position.  This guidance is effective during interim and annual periods beginning after January 1, 2013 and should be applied retrospectively for all comparative periods presented.  The implementation of this guidance will not have a material impact on its consolidated financial statements.
HUBEI CHUTIAN VIDEO COMMUNICATION NETWORK CO., LTD. [Member]
 
New Accounting Pronouncements and Changes in Accounting Principles [Text Block]
3. 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.
 
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.
 
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.
 
In May 2011, the FASB issued amendments to ASC 820 “Fair Value Measurements and Disclosures.”  Some of the amendments clarify the FASB’s intent about the application of existing fair value measurement requirements and others change a particular principle or requirement for measuring fair value or for disclosing information about fair value measurements.  This guidance is effective during interim and annual periods beginning after December 15, 2011 and is to be applied on a prospective basis. The implementation of this guidance will not have a material impact on its consolidated financial statements.
 
In June 2011, the FASB issued updated guidance to ASC 220 “Comprehensive Income” which allows entities to present the total of comprehensive income, the components of net income, and the components of other comprehensive income either in a single continuous statement of comprehensive income or in two separate but consecutive statements.  This guidance, which is to be applied retrospectively, is effective for fiscal years, and interim periods within those years, beginning after December 15, 2011.  The implementation of this guidance will not have an impact on its consolidated financial statements.
 
In September 2011, the FASB issued amendments to ASC 350 “Intangibles-Goodwill and Other” which allow an entity to assess qualitatively whether it is necessary to perform the current two-step goodwill impairment test.  Performance of the two-step impairment test is required only if an entity determines it is more-likely-than-not that a reporting unit's fair value is less than its carrying amount.  Otherwise, no further testing is required.  This guidance is effective for annual and interim goodwill tests performed for fiscal years beginning after December 15, 2011; however, early adoption is permitted.  The Company expects that the implementation of this guidance will not have a material impact on its consolidated financial statements.
 
In December 2011, the FASB issued amendments to the disclosure requirements on offsetting in ASC 210 “Balance Sheet” which require an entity to disclose quantitative information about offsetting and related arrangements to enable users of its financial statements to understand the effect of those arrangements on its financial position.  This guidance is effective during interim and annual periods beginning after January 1, 2013 and should be applied retrospectively for all comparative periods presented.  The implementation of this guidance will not have a material impact on its consolidated financial statements.
 
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.
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Promissory note
12 Months Ended
Dec. 31, 2011
Debt Disclosure [Abstract]  
Promissory note [Text Block]
12.
Promissory note
 
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.
 
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 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 approximately $11 million in current debt and accrued interest obligations. Each Series A Convertible Preferred Share may be converted, at the option of the shareholder, into one ordinary share.
 
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.
 
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.
 
On April 1, 2011, China Cablecom Ltd. issued $27,500 promissory notes bearing interest rate of 8% per annum to promissory note holder. The note was repayable on demand. In the event of default, interest on amounts past due shall be paid at an interest rate of 12% per annum. For the year ended December 31, 2011, $1,681 was charged to interest expense.
 
On July 15, 2011, China Cablecom Ltd. issued $389,651 promissory notes due on November 15, 2011 bearing interest rate of 8% per annum to promissory note holder. For the year ended December 31, 2011, $16,876 was charged to interest expense. However, the Company was default in payment of the promissory note together with the interest on due date. In the event of default, interest on amounts past due shall be paid at an interest rate of 12% per annum. The occurrence of the default shall, at the option of the note holders, make all sum of principal and accrued interest immediately due and payable upon demand.
 
The Company had fully repaid the promissory notes together with accrued interest in September 2013.
XML 17 R18.htm IDEA: XBRL DOCUMENT v2.4.0.8
Land Use Rights, Net (HUBEI CHUTIAN VIDEO COMMUNICATION NETWORK CO., LTD. [Member])
12 Months Ended
Dec. 31, 2011
HUBEI CHUTIAN VIDEO COMMUNICATION NETWORK CO., LTD. [Member]
 
Land Use Rights Disclosure [Text Block]
9. Land Use Rights, Net
 
As of December 31, 2011 and 2010, the carrying value of the land use rights was $328,706 and $320,134 respectively.
 
At December 31, 2011, the land use rights approximately of $357,877 are still in the process of applying the title certificates.
 
For the years ended December 31, 2011 and 2010, amortization charge was $11,632 and $7,247 respectively included in general and administrative expenses.
 
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,
 
 
 
 
2012
 
$
11,632
 
2013
 
 
11,632
 
2014
 
 
11,632
 
2015
 
 
11,632
 
2016
 
 
11,632
 
Thereafter
 
 
270,546
 
 
 
 
 
 
 
 
$
328,706
 
XML 18 R38.htm IDEA: XBRL DOCUMENT v2.4.0.8
Subsequent Event
12 Months Ended
Dec. 31, 2011
Subsequent Events [Text Block]
23.
Subsequent Event
 
On January 31, 2012, the Company issued 901,546 ordinary shares at a consideration of $114,163 to Platinum Partners Value Arbitrage Fund LP to raise fund for financing the operations of the Company. Mark Nordlicht, a member of the board of directors of the Company, is the Chief Executive Officer of Platinum Partners Value Arbitrage Fund LP., the Company agreed to refund the subscription money back to Platinum.
 
On March 22, 2012, the Company disposed the assets of Hubei Chutian to the joint venture partner Hubei Chutian Radio & Television Information Network Co., Ltd at a consideration of $59,378,819 (RMB374,140,000). In accordance with the term of the agreement, JYNT agreed to transfer back the 49% equity interest to Hubei SOE. Meanwhile, JYNT agreed to terminate the joint venture contractual agreement, technical services agreement and loan agreement with Hubei Chutian and Hubei SOE respectively. As a result, Hubei Chutian was no longer the operating joint venture of JYNT since then. Up to the date of the audit report, the Company has received settlement of $59,061,404 (RMB372,140,000) from Hubei Chutian Radio & Television Information Network Co., Ltd. The estimated gain on disposal of Hubei Chutian was $9 million.
HUBEI CHUTIAN VIDEO COMMUNICATION NETWORK CO., LTD. [Member]
 
Subsequent Events [Text Block]
22. Subsequent Event
 
On January 10, 2012, the Company entered into a sale and leaseback arrangement from a financial leasing company for a lease loan of $7,935,374 (RMB50,000,000).
XML 19 R27.htm IDEA: XBRL DOCUMENT v2.4.0.8
Secured notes
12 Months Ended
Dec. 31, 2011
Debt Disclosure [Abstract]  
Secured Debt Disclosure [Text Block]
15.
Secured notes
 
Secured notes, net of discount consists of the following:
 
 
 
December 31, 2011
 
 
December 31, 2010
 
 
 
 
 
 
 
 
Secured note issued
 
$
16,159,035
 
 
$
17,062,563
 
Less: Principal reduction
 
 
-
 
 
 
(903,528
)
 
 
 
16,159,035
 
 
 
16,159,035
 
Less: Current portion
 
 
(16,159,035
)
 
 
-
 
Long-term portion
 
$
-
 
 
$
16,159,035
 
 
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. With the effective of the reverse share split of the ordinary share at a rate of 1 for 3 on March 1, 2010, three Convertible Preferred Shares can be convertible into one ordinary share. Such change was adopted retrospectively. The repayment was scheduled in 7 installments 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. The collaterals of secured notes include all owned and acquired right, title and interest of the Company.
 
During the years ended December 31, 2011 and 2010, there were 2,868,094 and 3,979,984 Series A Convertible Preferred Shares converted into Ordinary Shares, resulting in the reduction of $nil and $903,528 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, 2011 and 2010, totally $2,025,257 and $813,068 were included in accrued expenses. The Company was default in payment of interest on due date. In the event of default, interest on amounts past due shall be paid at an interest rate of 15% per annum. The occurrence of the default shall, at the option of the note holders, make all sum of principal and accrued interest immediately due and payable upon demand.
XML 20 R26.htm IDEA: XBRL DOCUMENT v2.4.0.8
Unsecured notes
12 Months Ended
Dec. 31, 2011
Debt Disclosure [Abstract]  
Unsecured Debt Disclosure Text Block [Text Block]
14.
Unsecured notes
 
 
 
December 31, 2011
 
 
December 31, 2010
 
Unsecured note issued
 
$
4,218,128
 
 
$
5,134,795
 
Less: Principal reduction
 
 
-
 
 
 
(916,667
)
 
 
 
4,218,128
 
 
 
4,218,128
 
Less: Current portion
 
 
(4,218,128
)
 
 
-
 
Long-term portion
 
$
-
 
 
$
4,218,128
 
 
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. With the effective of the reverse share split of the ordinary share at a rate of 1 for 3 on March 1, 2010, three Convertible Preferred Shares can be convertible into one ordinary share. Such change was adopted retrospectively. The repayment was scheduled in 8 installments 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, 2011 and 2010, there were 2,409,301 and 2,566,201 Series A Convertible Preferred Shares converted into ordinary shares, resulting in the reduction of $nil and $210,906 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, 2011 and 2010, totally $528,670 and $240,259 were included in accrued expenses.
 
The Company was default in payment of interest on due date. In the event of default, interest on amounts past due shall be paid at an interest rate of 15% per annum. The occurrence of the default shall, at the option of the note holders, make all sum of principal and accrued interest immediately due and payable upon demand.
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Onshore and offshore loan agreements with Rich Dynamic Limited
12 Months Ended
Dec. 31, 2011
Debt Disclosure [Abstract]  
Loan Agreements [Text Block]
20.
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 the Company 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 the Company 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. By the end of December 31, 2011, the Company received all repayment of approximately $38 million from the shareholder of RDL.
XML 22 R31.htm IDEA: XBRL DOCUMENT v2.4.0.8
Shareholders' Equity
12 Months Ended
Dec. 31, 2011
Stockholders Equity Note Disclosure [Text Block]
17.
Shareholders’ 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.
 
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, 2011 and 2010, 5,277,395 and 6,546,185 Series A Preferred Shares and 1,684,224 and 8,333,397 Series B Preferred Shares had been converted into Ordinary Shares, respectively.
HUBEI CHUTIAN VIDEO COMMUNICATION NETWORK CO., LTD. [Member]
 
Stockholders Equity Note Disclosure [Text Block]
18. Registered Capital
 
 
 
December 31, 2011
 
 
December 31, 2010
 
 
 
 
 
 
 
 
Registered capital
 
$
15,005,484
 
 
$
15,005,484
 
 
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).
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Convertible notes
12 Months Ended
Dec. 31, 2011
Debt Disclosure [Abstract]  
Convertible notes [Text Block]
13.
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.
 
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.
 
Due to the default in payment of both principal and interest of promissory notes in April 2009, the Company negotiated with the convertible note holders and completed the debt restructure in October 2009. The Company also entered into a waiver agreement with the consent from all the convertible note holders. 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. Each Series A Convertible Preferred Share may be converted, at the option of the shareholder, into one ordinary share.
 
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 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.
 
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.
XML 25 R6.htm IDEA: XBRL DOCUMENT v2.4.0.8
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY (USD $)
Total
HUBEI CHUTIAN VIDEO COMMUNICATION NETWORK CO., LTD. [Member]
Series A Preferred Stock [Member]
Series B Preferred Stock [Member]
Common Stock [Member]
Common Stock [Member]
HUBEI CHUTIAN VIDEO COMMUNICATION NETWORK CO., LTD. [Member]
Additional Paid-in Capital [Member]
Retained Earnings [Member]
Retained Earnings [Member]
HUBEI CHUTIAN VIDEO COMMUNICATION NETWORK CO., LTD. [Member]
Accumulated Other Comprehensive Income (Loss) [Member]
Accumulated Other Comprehensive Income (Loss) [Member]
HUBEI CHUTIAN VIDEO COMMUNICATION NETWORK CO., LTD. [Member]
Balance at Dec. 31, 2008 $ 30,817,239   $ 0 $ 0 $ 4,839   $ 45,526,562 $ (15,295,384)   $ 581,222  
Balance (in shares) at Dec. 31, 2008     0 0 3,225,711            
Issuance of Preferred Shares related to debt restructure 51,323,443   32,900 0 0   51,290,543 0   0  
Issuance of Preferred Shares related to debt restructure (in shares)     65,799,285 0 0            
Issuance of Preferred Shares related to issue of Senior Secured notes, net of issuance costs 10,542,539   0 11,579 0   10,530,960 0   0  
Issuance of Preferred Shares related toissue of Senior Secured notes, net of issuance costs (in shares)     0 23,158,080 0            
Share issued as payment forbrokerfee 585,000   0 0 375   584,625 0   0  
Share issued as payment for broker fee (in shares)     0 0 250,000            
Conversion of Preferred Shares 1,302,642   (1,819) 0 1,819   1,302,642 0   0  
Conversion of Preferred Shares (in shares)     (3,637,320) 0 1,212,440            
Stock option compensation expenses 217,538   0 0 0   217,538 0   0  
Net loss (54,868,991)   0 0 0   0 (54,868,991)   0  
Cumulative translation adjustment (14,763)   0 0 0   0 0   (14,763)  
Balance at Dec. 31, 2009 39,904,647 495,460 31,081 11,579 7,033 2,940,918 109,452,870 (70,164,375) (2,430,451) 566,459 (15,007)
Balance (in shares) at Dec. 31, 2009     62,161,965 23,158,080 4,688,151            
Share issued as payment for interest 1,092,052 12,064,566 0 0 2,249 12,064,566 1,089,803 0 0 0 0
Share issued as payment for interest (in shares)     0 0 1,500,225            
Share issued as payment for legal fee 326,251   0 0 338   325,913 0   0  
Share issued as payment for legal fee (in shares)     0 0 225,000            
Conversion of Preferred Shares 1,820,195   (3,273) (4,167) 7,440   1,820,195 0   0  
Conversion of Preferred Shares (in shares)     (6,546,185) (8,333,397) 4,959,865            
Stock option compensation expenses 1,679,368   0 0 0   1,679,368 0   0  
Net loss (14,407,687) (10,367,435) 0 0 0 0 0 (14,407,687) (10,367,435) 0 0
Cumulative translation adjustment (161,423) (1,023,097) 0 0 0 0 0 0 0 (161,423) (1,023,097)
Balance at Dec. 31, 2010 30,253,403 1,169,494 27,808 7,412 17,060 15,005,484 114,368,149 (84,572,062) (12,797,886) 405,036 (1,038,104)
Balance (in shares) at Dec. 31, 2010     55,615,780 14,824,683 11,373,241            
Conversion of Preferred Shares 0   (2,639) (842) 3,481     0   0  
Conversion of Preferred Shares (in shares)     (5,277,395) (1,684,224) 2,320,539            
Stock option compensation expenses 1,662,876   0 0 0   1,662,876 0   0  
Net loss (20,736,932) (4,618,169) 0 0 0 0 0 (20,736,932) (4,618,169) 0 0
Cumulative translation adjustment (3,201,968) (1,337,481) 0 0 0 0 0 0 0 (3,201,968) (1,337,481)
Balance at Dec. 31, 2011 $ 7,977,379 $ (4,786,156) $ 25,169 $ 6,570 $ 20,541 $ 15,005,484 $ 116,031,025 $ (105,308,994) $ (17,416,055) $ (2,796,932) $ (2,375,585)
Balance (in shares) at Dec. 31, 2011     50,338,385 13,140,459 13,693,780            
XML 26 R8.htm IDEA: XBRL DOCUMENT v2.4.0.8
Organization and Basis of Preparation of Financial Statements
12 Months Ended
Dec. 31, 2011
Organization, Consolidation and Presentation of Financial Statements Disclosure [Text Block]
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.
 
China Cablecom Ltd is the sole 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, through HK Cablecom and HZNT, entered into a series of contractual arrangement with Jinan Youxiantong Network Technology Co. Ltd ("JYNT") and its shareholders. As a result of the following contractual arrangements, the Company controlled and were considered the primary beneficiary of JYNT (Variable Interest Entities “V.I.E.) as defined under FASB ASC 810-10. JYNT incorporated under the laws of the PRC on July 16, 2007.
 
The following was a summary of the currently effective contracts among our wholly owned subsidiaries HZNT and HK Cablecom, our JYNT (V.I.E.) and its nominee shareholders.
 
l
Loan Agreements: pursuant to loan agreements dated June 30, 2007, HK Cablecom extended loans of RMB484,500 and RMB25,500 respectively to Pu Yue and Liang Yuejing. Upon the occurrence of an event of default or otherwise, HK Cablecom 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 HK Cablecom or HK Cablecom’s designees within 5 business days.
 
l
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.
 
l
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 agreements. 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.
 
l
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.
 
l
Power of Attorney: pursuant to a power of attorney signed by Pu Yue and Liang Yuejing, Pu Yue and Liang Yuejing appointed HK Cablecom’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 HK Cablecom and the two nominee shareholders.
 
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.
 
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 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.
 
In late 2010, the Government of Shandong Province made an announcement for the consolidation of its provincial cable assets in Shandong Province. In accordance with “Lu Ban Fa” (2010) No.18, the Province will create a new company namely “Shandong Broadcasting and Television Network Co., Ltd.” and required all the cable network companies in Shandong Province to transfer all its assets and revenue to Shandong Broadcasting and Television Network Co., Ltd. Under this government policy, Binzhou Broadcasting was also required to transfer all its assets and revenue to the new company with effective from September 16, 2011. The business operation of Binzhou Broadcasting was suspended effective September 16, 2011. All the contractual agreement and the exclusive services agreement made between JYNT, Binzhou SOE and Binzhou Broadcasting were effectively terminated accordingly.
 
During the year ended December 31, 2011, Binzhou SOE charged a penalty of $754,979 (RMB5,000,000) against JYNT for the failure of settlement of further capital contribution of $16 million in accordance with the “Amendment Framework Agreement”. As a result, the economic benefit percentage of JYNT and Binzhou SOE in Binzhou Broadcasting was proportionally adjusted to reflect the actual fund provided and the deduction of penalty. The parties are currently negotiating the existence and continued operations of Binzhou Broadcasting and the extent of the continued obligations of JYNT.
 
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, as well as received 11% of the economic benefits in Hubei Chutian, through an exclusive technical services agreement, for total consideration of approximately $60.4 million. This exclusive technical services agreement provides marketing, strategic consulting and technical support and services for 11% of the net profits of Hubei Chutian.
 
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. The total consideration was changed to approximately $55.6 million. Besides, Hubei Chutian guaranteed to pay a 8% minimum rate of return on investment to JYNT if the return from service charge together with the share of 49% equity interest of Hubei Chutian was less than that minimum rate. The guarantee return was treated as management fee income received by JYNT.
 
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.
 
On October 20, 2011, JYNT was approached by the joint venture partner, Hubei SOE, regarding the purchase of the assets and equity interest in Hubei Chutian. The proposed offer was agreed and approved by the Board of Directors of the Company. The parties entered into a Termination Agreement on March 22, 2012 and an Equity Transfer Agreement on June 15, 2012, pursuant to which the parties agreed to consideration of $59,378,819 (RMB374,140,000) for the purchase by Hubei SOE of the assets and equity interest in Hubei Chutian to be received in six installments. The first installment of $7,935,374 (RMB50,000,000) was paid on March 22, 2012 as termination compensation; the second installment of $16,029,456 (RMB101,000,000) was paid on June 15, 2012; the third installment of $7,935,374 (RMB50,000,000) is due on the date when representative of JYNT and Hubei SOE go to the Administration for Industry and Commerce to submit the application for the change of registration of Hubei Chutian; the fourth installment of $7,935,374 (RMB50,000,000) is due prior to July 25, 2012; the fifth installment of $11,609,524 (RMB73,140,000) is due prior to August 25, 2012 and the final installment of $7,935,374 (RMB50,000,000) is due prior to September 25, 2012. In accordance with the terms of the agreement, JYNT agreed to transfer back its entire 49% equity interest in Hubei Chutian to the Hubei SOE and terminate the joint venture contractual agreement, technical services agreement and loan agreement with Hubei Chutian and Hubei SOE respectively. As a result, Hubei Chutian was no longer the operating joint venture of JYNT since then. Up to the date of this report, the Company had received totally $59,061,404 (RMB372,140,000) from Hubei SOE and the balance of $317,415 (RMB2,000,000) was kept as retention money as requested by Hubei SOE and will be refunded afterward.
 
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, 2011, 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.
 
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.
 
The following table shows the Balance Sheets of JYNT as of December 31, 2011 and 2010:
 
 
 
December 31, 2011
 
 
December 31, 2010
 
ASSETS
 
 
 
 
 
 
 
 
Current Assets:
 
 
 
 
 
 
 
 
Cash and cash equivalents
 
$
101,616
 
 
$
142,466
 
Prepaid expenses and advances
 
 
3,705
 
 
 
5,033
 
Total Current Assets
 
 
105,321
 
 
 
147,499
 
Property, plant & equipment, net
 
 
5,296
 
 
 
7,372
 
Investment in operating joint venture
 
 
50,378,205
 
 
 
64,026,705
 
 
 
 
 
 
 
 
 
 
Total Assets
 
$
50,488,822
 
 
$
64,181,576
 
 
 
 
 
 
 
 
 
 
LIABILITIES
 
 
 
 
 
 
 
 
Current Liabilities:
 
 
 
 
 
 
 
 
Other current liabilities
 
$
2,336,801
 
 
$
1,231,998
 
Amount due to HZNT
 
 
26,065,169
 
 
 
24,797,141
 
Amount due to China Cablecom
 
 
39,275,207
 
 
 
37,506,013
 
Amount due to Hubei Chutian
 
 
3,189,195
 
 
 
7,050,397
 
 
 
 
 
 
 
 
 
 
Total Liabilities
 
 
70,866,372
 
 
 
70,585,549
 
 
 
 
 
 
 
 
 
 
OWNERS’ EQUITY
 
 
 
 
 
 
 
 
Registered Capital
 
 
69,728
 
 
 
69,728
 
Additional paid-in capital
 
 
79,812
 
 
 
79,812
 
Accumulated deficit
 
 
(15,990,313
)
 
 
(6,028,997
)
Accumulated other comprehensive loss
 
 
(4,536,777
)
 
 
(524,516
)
 
 
 
 
 
 
 
 
 
Total owners’ deficiency
 
 
(20,377,550
)
 
 
(6,403,973
)
 
 
 
 
 
 
 
 
 
Total liabilities and owners’ deficiency
 
$
50,488,822
 
 
$
64,181,576
 
 
The following table shows the Statements of Operations of JYNT for the years ended December 31, 2011 and 2010:
 
 
 
For the year ended
 
 
For the year ended
 
 
 
December 31, 2011
 
 
December 31, 2010
 
Management fee income
 
$
4,632,022
 
 
$
4,450,438
 
Share of loss on operating joint ventures
 
 
(2,448,005
)
 
 
(8,247,873
)
 
 
 
2,184,017
 
 
 
(3,797,435
)
Operating expenses
 
 
 
 
 
 
 
 
General and administrative expenses
 
 
52,673
 
 
 
59,888
 
Total operating expenses
 
 
52,673
 
 
 
59,888
 
Profit / (loss) from operations
 
 
2,131,344
 
 
 
(3,857,323
)
 
 
 
 
 
 
 
 
 
Other income / (expenses)
 
 
 
 
 
 
 
 
Interest income
 
 
549
 
 
 
8,092
 
Interest expense
 
 
(516,130
)
 
 
(495,891
)
Forfeiture of investment fund
 
 
(754,979
)
 
 
-
 
Provision for impairment on investment
 
 
(9,806,150
)
 
 
-
 
Total other expenses
 
 
(11,076,710
)
 
 
(487,799
)
Loss before income taxes
 
 
(8,945,366
)
 
 
(4,345,122
)
Income taxes expenses
 
 
(1,015,950
)
 
 
(975,688
)
Net loss
 
$
(9,961,316
)
 
$
(5,320,810
)
 
The following table shows the condensed cash flows of JYNT for the years ended December 31, 2011 and 2010:
 
 
 
For the year ended
 
 
For the year ended
 
 
 
December 31, 2011
 
 
December 31, 2010
 
 
 
 
 
 
 
 
Net cash (used in) / provided by operating activities
 
$
(46,772
)
 
$
1,602,628
 
 
 
 
 
 
 
 
 
 
Net cash used in investing activities
 
 
(155
)
 
 
(6,661,246
)
 
 
 
 
 
 
 
 
 
Net decrease in cash
 
 
(46,927
)
 
 
(5,058,618
)
 
 
 
 
 
 
 
 
 
Effect of exchange rate changes on cash
 
 
6,077
 
 
 
40,160
 
 
 
 
 
 
 
 
 
 
Cash at the beginning of the period
 
 
142,466
 
 
 
5,160,924
 
 
 
 
 
 
 
 
 
 
Cash at the end of the period
 
$
101,616
 
 
$
142,466
 
 
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.
HUBEI CHUTIAN VIDEO COMMUNICATION NETWORK CO., LTD. [Member]
 
Organization, Consolidation and Presentation of Financial Statements Disclosure [Text Block]
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.
XML 27 R11.htm IDEA: XBRL DOCUMENT v2.4.0.8
Going Concern and Management's Plans
12 Months Ended
Dec. 31, 2011
Going Concern [Text Block]
4.
Going Concern and Management’s Plans
 
The accompanying financial statements are presented on a going concern basis.  At December 31, 2011, the Company had a working capital deficit of approximately $43.7 million.  The Company generated a net loss of approximately $20.7 million, $14.4 million and $54.8 million during the years ended December 31, 2011, 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, 2011, 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. At the end of March 2012, the Company disposed its operating joint venture of Hubei Chutian to the joint venture partner for a consideration of $59,378,819 (RMB374,140,000). The proceeds will be used for repayment of the debts.
 
After the disposal of the equity investment in Hubei Chutian and the suspension of business operation of Binzhou Broadcasting, the Company did not have business operations. The management of the Company is seeking for potential business combinations which are in the best interest of the Company and its shareholders.
HUBEI CHUTIAN VIDEO COMMUNICATION NETWORK CO., LTD. [Member]
 
Going Concern [Text Block]
5. Going Concern
 
The accompanying financial statements are presented on a going concern basis.  At December 31, 2011, the Company had a working capital deficit of approximately $44.2 million.  The Company generated a net loss of approximately $4.6 million and $10.3 million during the years ended December 31, 2011 and 2010, 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, 2011, contained an explanatory paragraph regarding the Company's ability to continue as a going concern.
 
The owners 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. The Company also raised fund through finance lease with leasing company.
XML 28 R9.htm IDEA: XBRL DOCUMENT v2.4.0.8
Summary of Significant Accounting Policies
12 Months Ended
Dec. 31, 2011
Significant Accounting Policies [Text Block]
2.
Summary of Significant Accounting Policies
 
Cash and Cash Equivalents
Cash and cash equivalents include all cash and deposits in banks. As of December 31, 2011, most of total cash and cash equivalents were denominated in Renminbi (“RMB”) with its deposits placed with banks in the PRC. This cash is not freely convertible into foreign currencies and the remittance of these funds out of the PRC is subject to exchange control restrictions imposed by the PRC government. The remaining balance of cash and cash equivalents were 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, 2011, 2010 and 2009 was $343,272, 343,272 and $636,299, 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.
 
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.
 
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
 
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.
 
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.
 
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.
 
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, 2011
 
 
Balance sheet
 
RMB6.3009 to US$1.00
Statement of operations and comprehensive loss
 
RMB6.4618  to US$1.00
 
 
 
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
 
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, 2011, 2010 and 2009, due to net losses the Company’s share equivalents were anti-dilutive and excluded in the loss per share computations.
 
Revenue recognition
The principal activity of the Company was previously 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 management fee income was received from Hubei Chutian in accordance with the Exclusive Services Agreement signed between JYNT and Hubei Chutian.  JYNT was the sole service provider of Hubei Chutian and provides the services of marketing, strategic consulting and technical support. The Company recognizes the management fee income when the right to receive payment is established in accordance with the services agreement.
 
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.
 
Off-balance Sheet Arrangements
The Company does not have any off-balance sheet arrangements as of December 31, 2011, 2010 and 2009.
HUBEI CHUTIAN VIDEO COMMUNICATION NETWORK CO., LTD. [Member]
 
Significant Accounting Policies [Text Block]
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
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.
 
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 weighted average 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.
 
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 (new)
 
 
Years (old)
 
Furniture, fixtures and office equipment
 
 
5
 
 
 
5
 
Headend facilities
 
 
8
 
 
 
3-7
 
Motor vehicles
 
 
8
 
 
 
4-10
 
Fiber infrastructure and electric appliances
 
 
20
 
 
 
8-30
 
Land, buildings and building improvements
 
 
20-40
 
 
 
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.
 
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
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.
 
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 Statements of Income and the Statements of Equity.
 
Off-balance Sheet Arrangements
The Company does not have any off-balance sheet arrangements as of December 31, 2011 and 2010.
 
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, 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
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.
 
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, 2011
 
 
Balance sheet
 
RMB6.3009 to US$1.00
Statement of operations and comprehensive loss
 
RMB6.4618  to US$1.00
 
 
 
December 31, 2010
 
 
Balance sheet
 
RMB6.6227 to US$1.00
Statement of operations and comprehensive loss
 
RMB6.72565  to US$1.00
XML 29 R28.htm IDEA: XBRL DOCUMENT v2.4.0.8
Senior secured notes
12 Months Ended
Dec. 31, 2011
Debt Disclosure [Abstract]  
Senior Secured Notes Disclosure [Text Block]
16.
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. With the effective of the reverse share split of the ordinary share at a rate of 1 for 3 on March 1, 2010, three Convertible Preferred Shares can be convertible into one ordinary share. Such change was adopted retrospectively. 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. For the year ended December 31, 2011, 2010 and 2009, interest amounting to $3,548,793, $2,660,815 and 506,626 were amortized, using the effective interest rate method, to the New Notes. As of December 31, 2011 and 2010, the value of the New Notes was $14,182,704 and $10,633,911, respectively.
 
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 repayment was scheduled in 6 installments to be paid every 6 months starting from April 16, 2013. 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, 2011 and 2010, $343,271 and $343,272 was amortized to finance costs.
XML 30 R32.htm IDEA: XBRL DOCUMENT v2.4.0.8
Warrants
12 Months Ended
Dec. 31, 2011
Warrants and Rights Note Disclosure [Abstract]  
Warrants And Rights Note Disclosure [Text Block]
18.
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, 2011:
 
Name
 
Number of
Warrants Issued
 
 
Exercise Price
 
 
Expiration Date
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Warrants
 
 
2,115,385
 
 
$
0.858
 
 
 
8/10/2014
 
XML 31 R37.htm IDEA: XBRL DOCUMENT v2.4.0.8
Operating Risk
12 Months Ended
Dec. 31, 2011
Concentration Risk Disclosure [Text Block]
22.
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.
 
Concentration of income from operating joint ventures
All of the income of the Company is generated from the provision of management services to joint ventures. Any disposal of joint ventures’ operations will have significant impact on the income of the Company.
 
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.
 
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.
 
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.
HUBEI CHUTIAN VIDEO COMMUNICATION NETWORK CO., LTD. [Member]
 
Concentration Risk Disclosure [Text Block]
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, accounts and other receivable. As of December 31, 2011 and 2010, 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. For accounts and other receivable, the Company performs ongoing credit evaluations of its customers’ financial condition and historically has not experienced any significant collectability problem.
 
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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Statement - CONSOLIDATED BALANCE SHEETS Process Flow-Through: Removing column 'Dec. 31, 2009' Process Flow-Through: Removing column 'Dec. 31, 2008' Process Flow-Through: 103 - Statement - CONSOLIDATED BALANCE SHEETS [Paranthetical] Process Flow-Through: 104 - Statement - CONSOLIDATED STATEMENTS OF OPERATIONS Process Flow-Through: 105 - Statement - CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS Process Flow-Through: 107 - Statement - CONSOLIDATED STATEMENTS OF CASH FLOWS cablf-20111231.xml cablf-20111231.xsd cablf-20111231_cal.xml cablf-20111231_def.xml cablf-20111231_lab.xml cablf-20111231_pre.xml true true XML 34 R3.htm IDEA: XBRL DOCUMENT v2.4.0.8
CONSOLIDATED BALANCE SHEETS [Paranthetical] (USD $)
Dec. 31, 2011
Dec. 31, 2010
Common Stock, Par or Stated Value Per Share $ 0.0015 $ 0.0015
Common Stock, Shares Authorized 51,666,667 51,666,667
Common Stock, Shares, Issued 13,693,780 11,373,241
Common Stock, Shares, Outstanding 13,693,780  
Series A Convertible Preferred Stock [Member]
   
Preferred Stock, Par or Stated Value Per Share $ 0.0005 $ 0.0005
Preferred Stock, Shares Authorized 70,000,000 70,000,000
Preferred Stock, Shares Issued 50,338,385 55,615,780
Preferred Stock, Shares Outstanding 50,338,385  
Series B Convertible Preferred Stock [Member]
   
Preferred Stock, Par or Stated Value Per Share $ 0.0005 $ 0.0005
Preferred Stock, Shares Authorized 25,000,000 25,000,000
Preferred Stock, Shares Issued 13,140,459 14,824,683
Preferred Stock, Shares Outstanding 13,140,459  
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Cash and cash equivalents
12 Months Ended
Dec. 31, 2011
Cash and Cash Equivalents Disclosure [Text Block]
6.
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, 2011 and 2010, 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.
HUBEI CHUTIAN VIDEO COMMUNICATION NETWORK CO., LTD. [Member]
 
Cash and Cash Equivalents Disclosure [Text Block]
6. 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, 2011 and 2010, 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. Restricted cash is excluded from cash and cash equivalents.
XML 36 R5.htm IDEA: XBRL DOCUMENT v2.4.0.8
CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS (USD $)
12 Months Ended
Dec. 31, 2011
Dec. 31, 2010
Dec. 31, 2009
Net loss $ (20,736,932) $ (14,407,687) $ (54,868,991)
Other comprehensive income / (loss), net of tax:      
Foreign currency translation adjustment - Company (2,562,602) 324,588 (1,345)
Foreign currency translation adjustment - Operating joint ventures (639,366) (486,011) (13,418)
Total other comprehensive income / (loss) from continuing operations, net of tax (3,201,968) (161,423) (14,763)
Comprehensive loss attributable to the Company (23,938,900) (14,569,110) (54,883,754)
HUBEI CHUTIAN VIDEO COMMUNICATION NETWORK CO., LTD. [Member]
     
Net loss (4,618,169) (10,367,435)  
Other comprehensive income / (loss), net of tax:      
Foreign currency translation adjustment - Company (1,337,481) (1,023,097)  
Total other comprehensive income / (loss) from continuing operations, net of tax (1,337,481) (1,023,097)  
Comprehensive loss attributable to the Company $ (5,955,650) $ (11,390,532)  
XML 37 R2.htm IDEA: XBRL DOCUMENT v2.4.0.8
CONSOLIDATED BALANCE SHEETS (USD $)
Dec. 31, 2011
Dec. 31, 2010
ASSETS    
Cash and cash equivalents $ 592,709 $ 929,072
Prepaid expenses and advances 60,356 3,646,390
Total Current Assets 653,065 4,575,462
Property, plant & equipment, net 21,726 138,230
Investment in operating joint venture 50,378,205 64,026,705
Other Assets:    
Deferred financing costs, net 1,300,671 1,643,943
Total Assets 52,353,667 70,384,340
LIABILITIES AND SHAREHOLDERS’ EQUITY    
Promissory note 417,151 0
Other current liabilities 6,210,075 2,069,466
Amount due to Hubei Chutian 3,189,195 7,050,397
Senior secured notes 14,182,704 0
Secured notes 16,159,035 0
Unsecured notes 4,218,128 0
Total Current Liabilities 44,376,288 9,119,863
Long Term Liabilities:    
Senior secured notes 0 10,633,911
Secured notes 0 16,159,035
Unsecured notes 0 4,218,128
Total Liabilities 44,376,288 40,130,937
COMMITMENTS AND CONTINGENCIES 0 0
SHAREHOLDERS’ EQUITY    
Common Stock, Value, Issued 20,541 17,060
Additional paid-in capital 116,031,025 114,368,149
Accumulated deficit (105,308,994) (84,572,062)
Accumulated other comprehensive income/loss (2,796,932) 405,036
Total shareholders' equity 7,977,379 30,253,403
Total liabilities and shareholders’ equity 52,353,667 70,384,340
HUBEI CHUTIAN VIDEO COMMUNICATION NETWORK CO., LTD. [Member]
   
ASSETS    
Cash and cash equivalents 6,867,504 9,451,600
Accounts and other receivable 224,018 3,183,474
Prepaid expenses and advances 3,933,191 3,280,994
Inventories 6,435,300 4,070,459
Amount due from JYNT 3,189,195 7,050,397
Total Current Assets 20,649,208 27,036,924
Property, plant & equipment, net 96,925,739 83,179,431
Land use rights, net 328,706 320,134
Construction in progress 11,133,264 6,276,049
Intangible assets, net 13,206,373 14,006,759
Goodwill 19,275,561 19,275,561
Other Assets:    
Total Assets 161,518,851 150,094,858
LIABILITIES AND SHAREHOLDERS’ EQUITY    
Accounts payable 25,319,635 15,603,054
Loan payable to Hubei SOE, current portion 6,359,933 4,617,825
Service performance obligation 4,552,295 5,712,207
Obligations under capital lease, current portion 3,026,297 0
Other current liabilities 7,933,329 8,878,949
Amount due to Hubei Chutian 8,825,669 11,638,436
Total Current Liabilities 56,017,158 46,450,471
Long Term Liabilities:    
Obligations under capital lease less current portion 4,909,077 0
Loan payable to Hubei SOE, less current portion 8,917,959 10,530,342
Loan from owners 96,460,813 91,944,551
Total Liabilities 166,305,007 148,925,364
COMMITMENTS AND CONTINGENCIES      
SHAREHOLDERS’ EQUITY    
Common Stock, Value, Issued 15,005,484 15,005,484
Accumulated deficit (17,416,055) (12,797,886)
Accumulated other comprehensive income/loss (2,375,585) (1,038,104)
Total shareholders' equity (4,786,156) 1,169,494
Total liabilities and shareholders’ equity 161,518,851 150,094,858
Series A Convertible Preferred Stock [Member]
   
SHAREHOLDERS’ EQUITY    
Preferred Stock, Value, Issued 25,169 27,808
Series B Convertible Preferred Stock [Member]
   
SHAREHOLDERS’ EQUITY    
Preferred Stock, Value, Issued $ 6,570 $ 7,412
XML 38 R29.htm IDEA: XBRL DOCUMENT v2.4.0.8
Statutory Reserves (HUBEI CHUTIAN VIDEO COMMUNICATION NETWORK CO., LTD. [Member])
12 Months Ended
Dec. 31, 2011
HUBEI CHUTIAN VIDEO COMMUNICATION NETWORK CO., LTD. [Member]
 
Statutory Reserves Disclosure [Text Block]
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, 2011 and 2010, no statutory reserves are contributed by the Company because the Company incurred a significant loss.
XML 39 R23.htm IDEA: XBRL DOCUMENT v2.4.0.8
Other Current Liabilities
12 Months Ended
Dec. 31, 2011
Other Liabilities Disclosure [Text Block]
11.
Other Current Liabilities
 
Other current liabilities consist of the following:
 
 
 
December 31, 2011
 
 
December 31, 2010
 
 
 
 
 
 
 
 
Other payables
 
$
403,598
 
 
$
28,980
 
Accrued expenses
 
 
335,511
 
 
 
385,990
 
Accrued salaries and welfare
 
 
333,974
 
 
 
194,600
 
Provision for taxation - PRC
 
 
2,332,823
 
 
 
1,228,211
 
Accrued interest
 
 
2,804,169
 
 
 
231,685
 
 
 
 
 
 
 
 
 
 
Total
 
$
6,210,075
 
 
$
2,069,466
 
 
Included in other payables was the shares subscription money retained by the Company amounting to $383,041 for 2,104,833 ordinary shares. The Company has agreed with the subscriber not to issue the shares and the money will be refunded back to the subscriber.
HUBEI CHUTIAN VIDEO COMMUNICATION NETWORK CO., LTD. [Member]
 
Other Liabilities Disclosure [Text Block]
14. Other Current Liabilities
 
Other current liabilities consist of the following:
 
 
 
December 31, 2011
 
 
December 31, 2010
 
 
 
 
 
 
 
 
 
 
Other payable
 
$
2,072,582
 
 
$
3,280,615
 
Accrued expenses
 
 
2,230,835
 
 
 
1,789,574
 
Accrued salaries and welfare
 
 
3,461,359
 
 
 
3,803,746
 
Accrued interest
 
 
168,553
 
 
 
5,014
 
 
 
 
 
 
 
 
 
 
Total
 
$
7,933,329
 
 
$
8,878,949
 
 
Other payables are related to loan advance from others, guarantee deposit received from staff and set-top TV rental deposits received from users.
XML 40 R35.htm IDEA: XBRL DOCUMENT v2.4.0.8
Employee Benefits (HUBEI CHUTIAN VIDEO COMMUNICATION NETWORK CO., LTD. [Member])
12 Months Ended
Dec. 31, 2011
HUBEI CHUTIAN VIDEO COMMUNICATION NETWORK CO., LTD. [Member]
 
Compensation and Employee Benefit Plans [Text Block]
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 makes contributions totalled $3,096,431 and $2,358,483 for the years ended December 31, 2011 and 2010, respectively.
XML 41 R36.htm IDEA: XBRL DOCUMENT v2.4.0.8
Commitments and Contingencies
12 Months Ended
Dec. 31, 2011
Commitments and Contingencies Disclosure [Text Block]
21.
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.
HUBEI CHUTIAN VIDEO COMMUNICATION NETWORK CO., LTD. [Member]
 
Commitments and Contingencies Disclosure [Text Block]
20. 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.
XML 42 R13.htm IDEA: XBRL DOCUMENT v2.4.0.8
Stock Based Compensation
12 Months Ended
Dec. 31, 2011
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]  
Disclosure of Compensation Related Costs, Share-based Payments [Text Block]
5.
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, 2011, 2,810,000 options have been issued under the plan and 523,333 shares remain available to be issued.
 
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:
 
 
 
2011
 
 
2010
 
 
2009
 
 
 
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
 
 
 
2,810,000
 
 
$
2.07
 
 
 
-
 
 
 
-
 
Granted
 
 
-
 
 
 
-
 
 
 
-
 
 
 
-
 
 
 
2,810,000
 
 
$
2.07
 
Cancelled
 
 
(160,000
)
 
 
-
 
 
 
-
 
 
 
-
 
 
 
-
 
 
 
-
 
Options outstanding at end of year
 
 
2,650,000
 
 
$
2.07
 
 
 
2,810,000
 
 
$
2.07
 
 
 
2,810,000
 
 
$
2.07
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Options exercisable at end of year
 
 
2,650,000
 
 
 
 
 
 
 
2,810,000
 
 
 
 
 
 
 
2,810,000
 
 
 
 
 
Options available for issuance
 
 
523,333
 
 
 
 
 
 
 
523,333
 
 
 
 
 
 
 
523,333
 
 
 
 
 
 
During the years ended December 31, 2011, 2010 and 2009, the Company recorded stock based compensation of $1,662,876, $1,679,368 and $217,538, respectively, in connection with the issuance of stock options.
 
As of December 31, 2011 and 2010, the Company had total unrecognized compensation expense related to options granted of $1,428,847 and $3,091,723 respectively which will be recognized over a remaining service period of approximately one year.
XML 43 R30.htm IDEA: XBRL DOCUMENT v2.4.0.8
Leases (HUBEI CHUTIAN VIDEO COMMUNICATION NETWORK CO., LTD. [Member])
12 Months Ended
Dec. 31, 2011
HUBEI CHUTIAN VIDEO COMMUNICATION NETWORK CO., LTD. [Member]
 
Leases of Lessee Disclosure [Text Block]
17. Leases
 
On November 14, 2011, the Company entered into a sale and leaseback arrangement whereby the fiber infrastructure and electric appliances of three cable entities were sold to and leased back from a financial leasing company for a lease loan of $11,058,581 (RMB69,679,017.17). On the same date, the Company repaid the first rental of $3,123,207 (RMB19,679,017.17). The balances of lease loan will be repaid by seven instalments starting from February 14, 2012. The lease period was three years and expired on November 13, 2014. No interest expense was incurred for the year ended December 31, 2011. At December 31, 2011, the net carrying amounts of fiber infrastructure and electric appliances recorded under capital leases was $8,980,056.
 
Below is the schedule of future minimum capital lease obligations as of December 31, 2011:
 
 
 
Capital Leases
 
Year ending December 31,
 
 
 
 
2012
 
$
3,747,956
 
2013
 
 
3,481,174
 
2014
 
 
1,740,587
 
 
 
 
 
 
Total minimum lease payments
 
 
8,969,717
 
Less: amount representing interest (6.65%)
 
 
1,034,343
 
 
 
 
 
 
Present value of minimum capital lease payments
 
 
7,935,374
 
Less: obligations under capital leases, current portion
 
 
3,026,297
 
 
 
 
 
 
Obligations under capital leases less current portion
 
$
4,909,077
XML 44 R16.htm IDEA: XBRL DOCUMENT v2.4.0.8
Property, Plant and Equipment, Net
12 Months Ended
Dec. 31, 2011
Property, Plant and Equipment Disclosure [Text Block]
8.
Property, Plant and Equipment, Net
 
Property, plant and equipment, net consist of the following:
 
 
 
December 31, 2011
 
 
December 31, 2010
 
At cost:
 
 
 
 
 
 
 
 
Furniture, fixtures and office equipment
 
$
56,755
 
 
$
54,540
 
Motor vehicles
 
 
58,055
 
 
 
55,235
 
Building improvements
 
 
20,568
 
 
 
211,259
 
 
 
 
 
 
 
 
 
 
Total
 
 
135,378
 
 
 
321,034
 
 
 
 
 
 
 
 
 
 
Less: accumulated depreciation
 
 
(113,652
)
 
 
(182,804
)
 
 
 
 
 
 
 
 
 
Net book value
 
$
21,726
 
 
$
138,230
 
 
There were no impairment provisions made at December 31, 2011, 2010 and 2009. Depreciation expense for the years ended December 31, 2011, 2010 and 2009 were $120,556, $68,128 and $62,934, respectively.
HUBEI CHUTIAN VIDEO COMMUNICATION NETWORK CO., LTD. [Member]
 
Property, Plant and Equipment Disclosure [Text Block]
8. Property, Plant and Equipment, Net
 
Property, plant and equipment, net consist of the following:
 
 
 
December 31, 2011
 
 
December 31, 2010
 
At cost:
 
 
 
 
 
 
 
 
Furniture, fixtures and office equipment
 
$
1,092,693
 
 
$
970,160
 
Headend facilities
 
 
50,781,641
 
 
 
36,106,247
 
Motor vehicles
 
 
2,805,760
 
 
 
2,315,651
 
Fiber infrastructure and electric appliances
 
 
77,012,989
 
 
 
65,685,878
 
Buildings and building improvements
 
 
15,239,754
 
 
 
11,532,611
 
 
 
 
 
 
 
 
 
 
Total
 
 
146,932,837
 
 
 
116,610,547
 
 
 
 
 
 
 
 
 
 
Less: accumulated depreciation
 
 
50,007,098
 
 
 
33,431,116
 
 
 
 
 
 
 
 
 
 
Net book value
 
$
96,925,739
 
 
$
83,179,431
 
 
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, 2011, the buildings and motor vehicles approximately of $8,215,481 and $718,092 respectively, were still in the process of applying the title certificates.
 
Fiber infrastructure and electric appliances with net carrying amount of $8,980,056 was leased from leasing company under the sales and leaseback arrangement.
 
Depreciation for the year ended December 31, 2011 was $14,633,191 of which $13,739,233 was charged to cost of revenue and $893,958 was charged to general and administrative expenses.
 
Depreciation for the year ended December 31, 2010 was $15,426,966 of which $14,543,770 was charged to cost of revenue and $883,196 was charged to general and administrative expenses.
 
For the year ended December 31, 2011, the Company has written off part of property, plant and equipment amounting to $362,901, which was included in other expense.
XML 45 R12.htm IDEA: XBRL DOCUMENT v2.4.0.8
Change in Accounting Estimate (HUBEI CHUTIAN VIDEO COMMUNICATION NETWORK CO., LTD. [Member])
12 Months Ended
Dec. 31, 2011
HUBEI CHUTIAN VIDEO COMMUNICATION NETWORK CO., LTD. [Member]
 
Change in Accounting Estimate Disclosure [Text Block]
4. Change in Accounting Estimate
 
During the year 2011, the management performed extensive evaluation on the estimated useful life of all property, plant and equipment. The evaluation included the consideration of historical write-offs, improved efficiency and failure rates. The Company determined that the estimated useful life of headend facilities and motor vehicles were to be extended to eight years, while the estimated useful life of fiber infrastructure and electric appliances were to be extended to twenty years. This change in the useful life of property, plant and equipment was accounted as a change in accounting estimate beginning from January 1, 2011. This change had the effects of reducing depreciation and amortization expense and increasing net income in the results of operations for the year ended December 31, 2011 as follows:
 
Depreciation expense
 
$
(6,902,372
)
Net income
 
$
6,902,372
 
XML 46 R7.htm IDEA: XBRL DOCUMENT v2.4.0.8
CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $)
12 Months Ended
Dec. 31, 2011
Dec. 31, 2010
Dec. 31, 2009
Cash Flows From Operating Activities:      
Net loss $ (20,736,932) $ (14,407,687) $ (54,868,991)
Adjustments to reconcile net loss to net cash provided by operating activities:      
Depreciation 120,556 68,128 62,934
Share of loss on operating joint ventures 2,448,005 8,247,873 1,223,055
Stock compensation expenses 1,662,876 1,679,368 217,538
Loss on debt restructuring 0 0 39,663,466
Amortization of deferred financing costs 343,272 343,272 636,299
Interest expenses - Interest for Senior secured notes, Secured and Unsecured notes 6,102,720 3,714,142 777,036
Interest expenses - Interest for promissory notes 18,557 0 0
Interest expenses - Amortization of note payable discount 0 0 1,644,124
Interest expenses - Amortization of convertible note discount 0 0 7,310,878
Forfeiture of investment fund 754,979 0 0
Provision for impairment on investment 9,806,150 0 0
Change in assets and liabilities,      
Prepaid expenses and advances 1,334,949 2,141,867 780,876
Amount due to Hubei Chutian (4,116,169) (3,683,111) 10,733,508
Other current liabilities 1,472,466 1,926,001 173,298
Net cash (used in) / provided by operating activities (788,571) 29,853 8,354,021
Cash Flows From Investing Activities:      
Purchase of property, plant and equipment (155) (43,645) (20,069)
Capital investment in operating joint ventures 0 (6,657,839) (27,294,613)
Net cash used in investing activities (155) (6,701,484) (27,314,682)
Cash Flows From Financing Activities:      
Financing cost incurred 0 0 (2,066,215)
Cash received from offshore loan 0 286,892 0
Issuance cost of senior debts 0 0 (545,990)
Proceeds from issuance of senior secured notes 0 0 33,000,000
Early redemption of senior secured notes 0 0 (13,860,000)
Proceeds from issuance of promissory notes 417,151 0 0
Net cash provided by financing activities 417,151 286,892 16,527,795
Effect of exchange rate changes on cash 35,212 321,270 (1,545)
Net (decrease) /increase in cash (336,363) (6,063,469) (2,434,411)
Cash and cash equivalents at beginning of period 929,072 6,992,541 9,426,952
Cash and cash equivalents at end of period 592,709 929,072 6,992,541
Supplemental cash flow information:      
Interest paid 0 0 0
Income taxes paid 10 24 361
Value assigned to shares issued as payment for broker fee 0 0 585,000
Value assigned to shares issued as payment for legal fee 0 326,251 0
Value assigned to shares issued as payment for interest expense 0 1,092,052 0
Non-cash financing activities related to restructuring of debt (Note 2):      
Cancellation of promissory note and interest 0 0 11,851,678
Cancellation of convertible note and interest 0 0 23,308,298
Issuance of secured notes 0 0 18,000,000
Issuance of unsecured notes 0 0 5,500,000
Issuance of Series A Convertible Preferred Shares 0 0 51,323,443
Non-cash financing activities related to private financings (Note 2):      
Issuance of Series B Convertible Preferred Shares 0 0 15,045,953
Reduction of Notes as the result of conversion of Preferred Shares to Ordinary Shares 0 1,820,195 1,302,642
HUBEI CHUTIAN VIDEO COMMUNICATION NETWORK CO., LTD. [Member]
     
Cash Flows From Operating Activities:      
Net loss (4,618,169) (10,367,435)  
Adjustments to reconcile net loss to net cash provided by operating activities:      
Depreciation 14,633,191 15,426,966  
Amortization of land use rights 11,632 7,247  
Gain on disposal of property, plant and equipment 0 (725)  
Written off of property, plant and equipment 362,901 0  
Impairment loss on intangible assets 0 4,359,571  
Amortization of intangible assets 800,386 1,309,706  
Change in assets and liabilities,      
Accounts and other receivable 3,536,793 (1,594,683)  
Inventories (2,103,246) (135,188)  
Prepaid expenses and advances (965,052) (858,098)  
Accounts payable 8,697,598 4,570,834  
Amount due from JYNT 4,116,170 3,683,110  
Amount due to Hubei Chutian (3,322,328) (3,004,597)  
Service performance obligation (1,415,500) 2,672,392  
Other current liabilities (1,364,249) 1,451,511  
Net cash (used in) / provided by operating activities 18,370,127 17,520,611  
Cash Flows From Investing Activities:      
Purchase of property, plant and equipment (24,065,789) (27,982,448)  
Additions of construction in progress (4,423,720) (2,543,013)  
Sales proceeds of property, plant and equipment 19,043 87,045  
Net cash used in investing activities (28,470,466) (30,438,416)  
Cash Flows From Financing Activities:      
Repayment of loan to owners 0 (4,514,777)  
Loan payable to Hubei SOE (5,034,170) (2,651,006)  
Loan raised from Hubei SOE 4,406,282 11,474,239  
Loan raised 7,935,374 0  
Increase in registered capital 0 12,064,566  
Net cash provided by financing activities 7,307,486 16,373,022  
Effect of exchange rate changes on cash 208,757 (3,258,664)  
Net (decrease) /increase in cash (2,584,096) 196,553  
Cash and cash equivalents at beginning of period 9,451,600 9,255,047  
Cash and cash equivalents at end of period 6,867,504 9,451,600  
Supplemental cash flow information:      
Interest paid 943,268 757,965  
Income taxes paid $ 0 $ 207  
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Related Party Transactions
12 Months Ended
Dec. 31, 2011
Related Party Transactions Disclosure [Text Block]
19.
Related Party Transactions
 
Amount due to Hubei Chutian
At December 31, 2011 and 2010, the amount due to Hubei Chutian was amounting to $3,189,195 and $7,050,397, respectively.  The Company borrowed the loan from Hubei Chutian to fund its operations.  The loan was unsecured, interest was fixed at $1,547,556 (RMB10,000,000) and repayment was scheduled in 6 installments to be repaid every 6 months starting from October 1, 2009. Pursuant to the termination agreement made between JYNT, Hubei Chutian and Hubei SOE, such loan advance will be waived by Hubei Chutian.
 
Management fee income
During the years ended December 31, 2011, 2010 and 2009, JYNT provided the services of marketing, strategic consulting and technical support to Hubei Chutian in accordance with the Exclusive Services Agreement and received management fee income amounting to $4,632,022, $4,450,438 and $1,004,596, respectively.
 
Interest expenses
During the years ended December 31, 2011, 2010 and 2009, JYNT incurred interest expenses of $515,852, $495,630, and $121,986, respectively, to Hubei Chutian in relation to the loan advanced from Hubei Chutian.
 
Issuance of promissory note
During the year ended December 31, 2011, the Company issued two promissory notes amounting to $417,152 to Platinum Partners Value Arbitrage Fund LP to raise fund for financing the operations of the Company. Mark Nordlicht, a member of the Board of Directors of the Company, is the Chief Executive Officer of Platinum Partners Value Arbitrage Fund LP.
 
Subscription of ordinary shares
During the year ended December 31, 2011, the Company received subscription money amounting to $383,041 for 2,104,833 ordinary shares from Platinum Partners Value Arbitrage Fund LP to raise fund for financing the operations of the Company. Mark Nordlicht, a member of the Board of Directors of the Company, is the Chief Executive Officer of Platinum Partners Value Arbitrage Fund LP.
HUBEI CHUTIAN VIDEO COMMUNICATION NETWORK CO., LTD. [Member]
 
Related Party Transactions Disclosure [Text Block]
15. Related Party Transactions
 
Amount due from JYNT
At December 31, 2011 and 2010, the amount due from JYNT was amounting to $3,189,195 and $7,050,397, respectively.  The Company lent the loan to JYNT to fund their operations.  The loan advanced was unsecured, interest was fixed at $1,547,556 (RMB10,000,000) and repayment was scheduled in 6 instalments to be repaid every 6 months starting from October 1, 2009. Pursuant to the termination agreement made between JYNT, Hubei SOE and the Company, such loan advance will be settled as part of the deal in 2012.
 
Management fee paid
During the years ended December 31, 2011 and 2010, the Company paid management fee of $4,632,022 and $4,450,438, respectively to JYNT for providing the services of marketing, strategic consulting and technical support in accordance with the Exclusive Services Agreement
 
Interest income
During the years ended December 31, 2011 and 2010, the Company received interest income of $515,852 and 495,630, respectively from JYNT in relation to the loan advanced to JYNT.
 
Loan from owners
 
 
 
December 31, 2011
 
 
December 31, 2010
 
 
 
 
 
 
 
 
 
 
JYNT
 
$
55,117,513
 
 
$
52,610,141
 
Hubei SOE
 
 
41,343,300
 
 
 
39,334,410
 
 
 
$
96,460,813
 
 
$
91,944,551
 
 
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.
 
Amount due to Hubei SOE
 
The cash advance from Hubei SOE was used for funding the daily business operations. As at December 31, 2011 and 2010, the amount due to Hubei SOE, totalling of $8,825,669 and $11,638,436, respectively, are unsecured, interest free and repayable on demand.  
 
Loan payable to Hubei SOE
 
 
December 31, 2011
 
 
December 31, 2010
 
 
 
 
 
 
 
 
 
 
Loan advance
 
$
15,277,892
 
 
$
15,148,167
 
 
 
 
 
 
 
 
 
 
Less: repayable within one year classified as current
liabilities
 
 
6,359,933
 
 
 
4,617,825
 
Repayable over one year classified as non-current liabilities
 
$
8,917,959
 
 
$
10,530,342
 
 
The loan advance from Hubei SOE was used for funding the daily business operations. The loan was unsecured, interest charged ranging from 6.43% - 6.77% per annum and repayable in 12 or 16 quarterly instalments within three or four years.
 
During the year ended December 31, 2011 and 2010, the interest charged regarding the loan advanced from Hubei SOE was $1,097,228 and $638,160, respectively.
 
Below is the schedule of loan repayment:
 
 
 
 
Loan repayment
 
For the years ending December 31,
 
 
 
 
 
2012
 
 
$
6,359,933
 
2013
 
 
 
5,900,282
 
2014
 
 
 
3,017,677
 
 
 
 
 
$
15,277,892
XML 49 R19.htm IDEA: XBRL DOCUMENT v2.4.0.8
Construction In Progress (HUBEI CHUTIAN VIDEO COMMUNICATION NETWORK CO., LTD. [Member])
12 Months Ended
Dec. 31, 2011
HUBEI CHUTIAN VIDEO COMMUNICATION NETWORK CO., LTD. [Member]
 
Construction In Progress Disclosure [Text Block]
10. 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 $11,133,264 and $6,276,049 as of December 31, 2011 and 2010, respectively.
  
 
 
Balance as of 
December 31, 2011
 
 
Estimated cost to
complete as of
December 31, 2011
 
 
Estimated time to
complete
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Fiber infrastructure
 
$
11,133,264
 
 
$
17,663,596
 
 
Before  November, 2012
 
  
No depreciation has been provided for construction in progress.
XML 50 R15.htm IDEA: XBRL DOCUMENT v2.4.0.8
Prepaid Expenses and Advances
12 Months Ended
Dec. 31, 2011
Deferred Costs Capitalized Prepaid Expenses And Other Assets Disclosure [Text Block]
7.
Prepaid Expenses and Advances
 
Prepaid expenses and other receivables consist of the following:
 
 
 
December 31, 2011
 
 
December 31, 2010
 
 
 
 
 
 
 
 
Loan advance
 
$
-
 
 
$
2,409,895
 
Advanced payments
 
 
60,356
 
 
 
1,236,495
 
Total
 
$
60,356
 
 
$
3,646,390
 
 
The loan advance was the offshore loan which was secured under share pledge agreement, interest-free and repayable on demand.
HUBEI CHUTIAN VIDEO COMMUNICATION NETWORK CO., LTD. [Member]
 
Deferred Costs Capitalized Prepaid Expenses And Other Assets Disclosure [Text Block]
7. Prepaid Expenses and Advances
 
Prepaid expenses and other receivables consist of the following:
 
 
December 31, 2011
 
 
December 31, 2010
 
 
 
 
 
 
 
 
 
 
Advanced payments
 
$
3,933,191
 
 
$
3,280,994
 
 
The advanced payments are cash advances to local branches for daily operations and advances for purchase of materials. Others include loan advanced to staff, which are unsecured, interest-free and repayable on demand.
XML 51 R22.htm IDEA: XBRL DOCUMENT v2.4.0.8
Income Taxes
12 Months Ended
Dec. 31, 2011
Income Tax Disclosure [Text Block]
10.
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.
 
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, 2011, 2010 and 2009. 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, 2011
 
 
For the year ended
December 31, 2010
 
 
For the year ended
December 31, 2009
 
PRC
 
 
 
 
 
 
 
 
 
 
 
 
- current income tax
 
$
1,015,951
 
 
$
975,712
 
 
$
230,567
 
- deferred income tax
 
 
-
 
 
 
-
 
 
 
-
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total
 
$
1,015,951
 
 
$
975,712
 
 
$
230,567
 
 
A reconciliation of the expected income tax expense to the actual income tax expense is as follows:
 
 
 
For the year ended
December 31, 2011
 
 
For the year ended
December 31, 2010
 
 
For the year ended
December 31, 2009
 
 
 
 
 
 
 
 
 
 
 
Loss before income taxes
 
$
(19,720,981
)
 
$
(13,431,975
)
 
$
(54,638,424
)
 
 
 
 
 
 
 
 
 
 
 
 
 
Tax calculated at the domestic tax rate of 25%
 
 
(4,930,245
)
 
 
(3,357,994
)
 
 
(13,659,606
)
Tax effect of expenses not deductible for tax purposes
 
 
5,334,201
 
 
 
2,271,844
 
 
 
13,586,330
 
Tax effect of share of profit and loss of operating joint ventures
 
 
612,001
 
 
 
2,061,968
 
 
 
305,764
 
Tax effect of non-taxable income
 
 
(6
)
 
 
(106
)
 
 
(1,921
)
 
 
 
 
 
 
 
 
 
 
 
 
 
Income tax expense
 
$
1,015,951
 
 
$
975,712
 
 
$
230,567
 
 
As of December 31, 2011, 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 years ended December 31, 2011, 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.
 
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, 2011, 2010 and 2009 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.
HUBEI CHUTIAN VIDEO COMMUNICATION NETWORK CO., LTD. [Member]
 
Income Tax Disclosure [Text Block]
13. 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 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 operations represents:
 
 
 
For the year ended
December 31,  2011
 
 
For the year ended
December 31,  2010
 
PRC
 
 
 
 
 
 
 
 
- over provided income tax in previous year
 
 
-
 
 
 
(485,432
)
 
 
 
 
 
 
 
 
 
Total
 
$
-
 
 
$
(485,432
)
 
A reconciliation of the expected income tax expense to the actual income tax expense is as follows:
 
 
 
For the year ended
December 31,  2011
 
 
For the year ended
December 31,  2010
 
 
 
 
 
 
 
 
Loss before income taxes
 
$
(4,618,169
)
 
$
(10,852,867
)
 
 
 
 
 
 
 
 
 
Tax calculated at the domestic tax rate of 25%
 
 
(1,154,542
)
 
 
(2,713,217
)
Tax effect of expenses not deductible for tax purposes
 
 
1,154,542
 
 
 
2,406,021
 
Tax effect of tax losses not recognised
 
 
-
 
 
 
307,196
 
Income tax over provided in previous year
 
 
-
 
 
 
(485,432
)
 
 
 
 
 
 
 
 
 
Income tax credit
 
$
-
 
 
$
(485,432
)
 
As of December 31, 2011 and 2010, 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, 2011 and 2010, 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.
 
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.
XML 52 R20.htm IDEA: XBRL DOCUMENT v2.4.0.8
Intangible Assets, Net (HUBEI CHUTIAN VIDEO COMMUNICATION NETWORK CO., LTD. [Member])
12 Months Ended
Dec. 31, 2011
HUBEI CHUTIAN VIDEO COMMUNICATION NETWORK CO., LTD. [Member]
 
Intangible Assets Disclosure [Text Block]
11. Intangible Assets, Net
 
The following table summarizes the lives and carrying values of the Company's intangible assets by category:
 
At December 31, 2011
 
 
 
Useful
Life
 
 
Gross
Amount
 
 
Accumulated Amortization
 
 
Accumulated
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
 
 
 
(2,936,271
)
 
 
(944,437
)
 
 
13,206,373
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total amortized intangible assets
 
 
 
 
 
$
21,640,594
 
 
$
(4,074,650
)
 
$
(4,359,571
)
 
$
13,206,373
 
 
At December 31, 2010
 
 
 
Useful
Life
 
 
Gross
Amount
 
 
Accumulated
Amortization
 
 
Accumulated
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
 
 
Amortization expense for the years ended December 31, 2011 and 2010 was $800,387 and $1,309,706, respectively.
 
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,
 
 
 
 
2012
 
$
800,386
 
2013
 
 
800,386
 
2014
 
 
800,386
 
2015
 
 
800,386
 
2016
 
 
800,386
 
Thereafter
 
 
9,204,443
 
 
 
 
 
 
 
 
$
13,206,373
 
XML 53 R1.htm IDEA: XBRL DOCUMENT v2.4.0.8
Document And Entity Information
12 Months Ended
Dec. 31, 2011
Document Information [Line Items]  
Entity Registrant Name China Cablecom Holdings, Ltd.
Entity Central Index Key 0001416569
Current Fiscal Year End Date --12-31
Entity Filer Category Non-accelerated Filer
Trading Symbol CABLF
Entity Common Stock, Shares Outstanding 13,693,780
Document Type 20-F
Amendment Flag false
Document Period End Date Dec. 31, 2011
Document Fiscal Period Focus FY
Document Fiscal Year Focus 2011
Entity Well-known Seasoned Issuer No
Entity Voluntary Filers Yes
Entity Current Reporting Status No
XML 54 R21.htm IDEA: XBRL DOCUMENT v2.4.0.8
Goodwill (HUBEI CHUTIAN VIDEO COMMUNICATION NETWORK CO., LTD. [Member])
12 Months Ended
Dec. 31, 2011
HUBEI CHUTIAN VIDEO COMMUNICATION NETWORK CO., LTD. [Member]
 
Goodwill Disclosure [Text Block]
12. Goodwill
 
 
 
December 31, 2011
 
 
December 31, 2010
 
 
 
 
 
 
 
 
 
 
Goodwill
 
$
19,275,561
 
 
$
19,275,561
 
 
In accordance with FASB ASC 350 “Intangibles-Goodwill and Other”, it allow an entity to assess qualitatively whether it is necessary to perform the current two-step goodwill impairment test.  Performance of the two-step impairment test is required only if an entity determines it is more-likely-than-not that a reporting unit's fair value is less than its carrying amount.  Otherwise, no further testing is required.  No impairment loss of goodwill was recognized for the years ended December 31, 2011 and 2010.