Summary of CHINA BROADBAND INC

Item 6. Management's Discussion and Analysis and Plan of Operation.

The following discussion and analysis should be read in conjunction with our audited financial statements and related notes included in this report and the "Forward Looking Statements" and "Risk Factors" elsewhere in this report. The statements contained in this report that are not historic in nature, particularly those that utilize terminology such as "may," "will," "should," "expects," "anticipates," "estimates," "believes," or "plans" or comparable terminology are forward-looking statements based on current expectations and assumptions. These statements are based on current information available to management.

Factors that could cause actual results to differ from expectations include, but are not limited to, those set forth under the sections "Forward Looking Statements" in the forepart of this report and the "Risk Factors" above, all of which should be read together.

Background

The Company was organized in California in 1988 under the name "TJB Enterprises, Inc." as a blind pool/blank check company formed for the purpose of seeking a merger with a private operating company. We operated various businesses and underwent various reorganizations and a bankruptcy from inception through October of 2004 when we were reorganized into a Nevada corporation. From July 1, 2005 we operated as a blank check company under the name Alpha Nutra, Inc. in search of a business acquisition. See "Corporate History" subsection of "Item 1. Description of Business."

Current Nature of Operations

On January 23, 2007, pursuant to the Share Exchange Agreement (the "Share Exchange"), we acquired all of the shares of China Broadband Cayman from the four Broadband Shareholders in exchange for 37,865,506 shares (the "Exchange Shares") of our common stock, resulting in such shareholders controlling the Company and assumed obligations of China Broadband Cayman under $325,000 principal amount of 7% Convertible Promissory Notes, which became convertible into 1,300,000 shares of our common stock and assumed other related obligations. All of these 7% Convertible Promissory Notes have been converted into our common stock effective as of February 28, 2007 and all interest has been paid through such date in cash.

The Share Exchange has been accounted for as a reverse acquisition of the Company (then known as "Alpha Nutra, Inc.), with no adjustment to the historical basis of the assets and liabilities of China Broadband Cayman, and the operations were consolidated as though the transactions occurred as of the beginning of the first accounting period presented in the accompanying consolidated financial statements.

At the time of the closing of the Share Exchange Agreement, China Broadband Cayman was a party to a Cooperation Agreement (the "Cooperation Agreement") with Jian Guangdian Jiahe Digital Television Co., Ltd. ("Jinan Parent") to acquire a 51% controlling interest in an operating broadband cable internet company based in the City of Jinan in the Shandong Region of China, sometimes referred to herein as "Jinan Broadband." The Cooperation Agreement provided that the operating business' operations and pre-tax revenues would be assigned to our Jinan Broadband subsidiary for 20 years, effectively providing for an acquisition of the business. The Cooperation Agreement required an initial payment to Jinan Parent for the closing of the acquisition of this entity in early 2007, resulting in our China based WFOE owning a controlling 51% interest in Jinan Broadband and entry into the Exclusive Cooperation Agreement and an Exclusive Service Agreement. We have paid an aggregate of $5,772,000 for this business, of which, our initial payment of $2,572,000 was paid from our net proceeds from the first closing of our private offering in January 2007 and our second payment of $3,200,000 was completed in March 2008.

We currently operate through China Broadband Cayman, our wholly-owned subsidiary, which in turn operates through our WFOE located in China. The WFOE owns a 51% interest in Jinan Broadband, an operating broadband cable internet company based in the City of Jinan in the Shandong Region of China, and has entered into an Exclusive Service Agreement with Jinan Parent that enables us to share revenues. Through our WFOE, we have also entered into an agreement to create a joint venture entity that will own the Shandong Newspaper Business.
(See "Recent Developments" above and below.)

A complete description of the business of Jinan Broadband acquired by us in early 2007, along with an organizational chart and description of the Share Exchange and related agreements, can be found in the "Item 1. Description of Business" section of this Annual Report and is incorporated by reference herein.

Simultaneous Closing of 2007 Stock and Warrant Financing

Simultaneously with the closing of our acquisition of China Broadband Cayman on January 23, 2007, and in order to fund our first payment for the acquisition of the broadband business in China, we conducted the first closing of our private offering pursuant to which we entered into subscription agreements with investors for the sale of 6,000,000 shares of common stock and 3,000,000 Redeemable Common Stock Purchase Warrants, exercisable at $2.00 per share (the "Investor Warrants"). During the six months ended December 31, 2007 we raised an additional $1,000,000 such that we raised the aggregate maximum of $4,000,000 in this offering consisting of an aggregate of 8,000,000 shares and 4,000,000 warrants to accredited investors.

We used $2,572,125 of the proceeds of this offering from the first closing to pay the first installment plus expenses of our acquisition of a 51% interest in the China based broadband cable internet business spun off by Jinan Parent. We granted the investors registration rights in connection with this offering and compensated WestPark Capital, Inc., our placement agent, with a placement agent fee consisting of $320,000 plus expenses, and issued to them 640,000 warrants to purchase common stock at $.60 per share, paid during the year ended December 31, 2007. In addition we paid approximately $100,000 in other professional expenses during such time period for this transaction.

Strategy

Our strategy is to grow our business organically as well as via acquisitions and/or partnerships in the PRC with companies that are in, or complimentary to, the broadband arena. We have spent significant amounts of money for professional services related to this strategy and are not profitable. During 2007 we spent approximately $628,000 for professional services related to the Share Exchange, the acquisition of Jinan Broadband and for public company expenses. We expect that we will continue to incur significant expenses for professional services as well as other costs during 2008 and may not be profitable as we continue to implement our strategy.

Our strategy also includes completion of our acquisition of Shandong Newspaper (which we believe is imminent) in a joint venture. Shandong Newspaper's business includes three main magazines: Shandong Broadcast & TV Weekly (Newspaper), TV Weekly Magazine and Mordern Movie Times Magazine (Bi-Weekly). We intend to invest our acquisition cost in this Joint Venture to increase sales and advertising revenues of its periodicals in order to become profitable. No assurance can be made that we will complete this acquisition or, if completed, that our business plan will be successful. Additional information related to our business and strategy as to the business of Shandong Newspaper is included in the section of this Annual Report titled "Item 1. Description of Business" above.

Recent Developments

Settlement Agreement, Convertible Note and Warrant Financing, Shandong Newspaper Joint Venture

On January 11, 2008, the Company entered into a Settlement Agreement (the "Settlement Agreement") by and among the Company and its subsidiaries, Stephen P. Cherner, Maxim Financial Corporation, Mark L. Baum, BCGU, LLC, Mark I Lev, Wellfleet Partners, Inc., Yue Pu, Clive Ng, Chardan Capital Markets, LLC ("Chardan Capital"), Jaguar Acquisition Corporation ("Jaguar"), and China Cablecom Holdings, Ltd ("Cablecom Holdings"). We also appointed additional directors at the time of entering into the settlement agreement and revised the terms of certain affiliates' employment agreements.

Simultaneously, we consummated a private, 5% convertible note and warrant financing with gross proceeds of $4,850,000 (the "January 2008 Financing"), through Chardan Capital acting as Placement Agent and appointed three additional directors and a new Chief Executive Officer to the Company.

Additionally, we entered into an agreement to acquire, through a joint venture, a controlling interest in Shandong Newspaper, a PRC based television programming guide business.

Settlement Agreement with Ceratin Officers and China Cablecom

In connection with a potential dispute with our investors and with Cablecom Holdings, another company formed by the principal stockholder of the Company, Mr. Ng, on January 11, 2008, we entered into a settlement agreement relating to such matters with Jaguar and certain of our consultants and shareholders. In addition, we have been obtaining separate releases from various holders of our common stock. The Settlement Agreement was negotiated by us, our advisors and management and certain shareholders, for purposes of facilitating our business plan and expediting and facilitating our financing activities and resolving all disputes with management, perceived or otherwise, and certain investors and consultants concerning possible claims that such investors suggested might be brought against Mr. Ng or the Company for his activities in forming and providing services for Cablecom Holdings. The Settlement agreement provides, subject to the terms thereof, for general mutual releases of all executives and management and their affiliated entities and also provides for the modification of employment agreements of both Mr. Clive Ng and Mr. Pu. The Settlement Agreement also calls for the transfer of certain securities by Mr. Ng to the Company and to certain of the Company's shareholders and consultants, as elaborated further herein in exchange for releases in favor of the Company and management and their affiliates.

Among other material provisions, pursuant to the Settlement Agreement the following agreements have been entered into:

· Clive Ng, our Chairman, has agreed to transfer, not later than three business days after the closing of the proposed merger of a subsidiary of Cablecom Holdings, as successor to Jaguar Acquisition Corporation, a Delaware corporation ("Jaguar") in its proposed redomestication merger, with and into China Cablecom, Ltd., a private limited liability British Virgin Islands company ("China Cablecom") (the "Proposed Merger"), of 390,000 shares of common stock of Cablecom Holdings (the "Cablecom Holdings Shares"), the resulting surviving parent entity after the Proposed Merger. The 390,000 Cablecom Holdings Shares will only be issued in the event of consummation of the Proposed Merger and is to be transferred by Mr. Ng on an "as is basis", except that such shares have the same lock-up restrictions, registration or other rights, privileges or benefits as Mr. Ng has for all other shares to be issued to him by Cablecom Holdings under the Proposed Merger terms. The 390,000 Cablecom Holdings Shares will only be issued upon receipt of releases from certain parties listed in the Settlement Agreement;

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

· The Company agreed to extend the expiration dates of 4,000,000 Investor Warrants at an exercise price of $2.00 per share, in the Company's private placement of common stock and warrants in 2007, from March of 2009, through January 11, 2013, upon receipt of releases from such Investor Warrant holders. In addition, the Company has offered to BCGU, LLC, WestPark Capital, Inc., Maxim Financial Corporation, who were issued 500,000, 640,000 and 3,974,800 warrants exercisable at $.60 per share in January of 2007, the right, at their discretion, to extend the exercisability period of their respective warrants through January 11, 2013 or, in the alternative, the right to receive a scrip right to execute the unexercised portion of their warrants, at any time between the time of expiration date of their unexercised warrants and continuing through January 11, 2013.

Additional specific provisions relating to the terms of this Settlement Agreement can be found under "Item 1. Description of Business" above, and in our

Notwithstanding the terms of the Settlement Agreement Mr. Ng's and Mr. Pu's continuing relationship with Cablecom Holdings could lead to future claims of violation of his duties them or us in the event future acquisitions in the PRC are offered to Cablecom Holdings rather than China Broadband or visa versa, notwithstanding the express terms of the revised employment agreement and provisions of the Settlement Agreement. Mr. Ng's revised employment agreement with China Broadband contains an express provision permitting Mr. Ng to resign from China Broadband in the event an acquisition arises that involves the business of China Cablecom, which is how Mr. Ng currently intends to handle opportunities in the future that could create a situation similar to that which led to the settlement agreement.

Simultaneous Closing of $4,971,250 Convertible Note and Warrant Financing

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

An aggregate of $4,971,250 principal amount of Notes was issued to ten investors including Chardan Capital which applied its 2.5% cash commission towards a subscription for Notes and Class A Warrants. Interest on the Notes compound monthly at the annual rate of five percent (5%) with the maturity date on January 11, 2013, if not sooner paid. Each holder of a Note can convert all or any portion of the then aggregate outstanding principal amount of the Note, together with interest, into shares of Common Stock at a conversion price of $0.75 per share, for or a total of 6,628,333 shares as of the date of issuance. The Notes are granted "full ratchet" anti dilution protection for the first three years, pursuant to which the conversion price of the Notes will be adjusted downward in the event of the issuance by the Company of Common Stock or rights to acquire common stock at prices below $.75 per share (or below such other conversion price of the Notes as is then in effect) to such lower price. Thereafter and until repaid, the Notes provide only for weighted average anti-dilution price protection adjustment. In addition, the Notes are subject to certain customary anti dilution protections for stock splits, combinations or similar transactions of the Company.

An aggregate of 6,628,333 Class A Warrants, exercisable at $0.60 per share and expiring on June 11, 2013 were issued pursuant to the Subscription Agreement as part of the January 2008 Financing. The Class A Warrants shall be exercisable
(with cash or via cashless exercise) commencing one hundred and eighty-one (181)
days after the closing date of the January 2008 Financing until 65 months thereafter, June 11, 2013. The Class A Warrants are subject to "full ratchet" anti-dilution protection for the first three years, pursuant to which the exercise price of the Class A Warrants will be adjusted downward in the event of the issuance by the Company of common stock or rights to acquire Common Stock at prices below $.60 per share (or below such other exercise price of the Class A Warrants as is then in effect) to such lower price. Thereafter and until all Class A Warrants are exercised or expire, the Class A Warrants provide only for weighted average anti-dilution price protection adjustment. In addition, the Class A Warrants are subject to certain customary anti-dilution protections for stock splits, combinations or similar transactions of the Company.

Placement Agent Fee and Warrants to Chardan Capital Markets, LLC

In connection with their engagement as a placement agent, Chardan Capital has been compensated a $10,000 due diligence fee and reimbursement of legal and other expenses, and a cash placement agent fee of 2.5% based on the total amount sold to investors, or $121,250 based on $4,850,000 of principal amount of Notes issued to other investors. Chardan Capital has, pursuant to the terms of their engagement agreement, agreed to apply their cash compensation of $121,250 into an investment in a $121,250 Note and 166,667 Class A Warrants at the same terms as all other investors in the offering. In addition, Chardan Capital was compensated warrants to acquire 1,131,667 shares of the Company's Common Stock at an exercise price of $.50 per share exercisable commencing January 11, 2008 and expiring on June 11, 2013 (the "Broker Warrants"). The Broker Warrants are identical to the Class A Warrants in all other material respects.

Assignment By Clive Ng of Shares to Investors; Release of Lock - Up Agreements

To incentivize the investors in January 2008 Financing and facilitate such financing, and as contemplated under the terms of the Settlement Agreement, Mr. Clive Ng assigned an aggregate of 7,017,814 shares of Common Stock beneficially owned by him to the January 2008 Financing investors, other than Chardan Capital, at a nominal purchase price of $.01 per share. This reduced the average purchase price per share to investors (presuming conversion of their notes) without cost to the Company.

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

Board of Directors and Employment Agreement Amendments

Simultaneously with the closing of the January 2008 Financing, and entry into the Settlement Agreement, Messrs. David Zale, James Cassano and Jonas Grossman were appointed as directors of the Company, joining Messrs. Clive Ng and Yue Pu. Additional information relating to these appointments can be found in our "Management" section below, which is incorporated herein.

Shandong Newspaper Cooperation Agreement

On March 7, 2008, the Company, through its indirect WFOE subsidiary in the PRC, Ji'Nan Zhongkuan Dian Guang Information Technology Co. ("Jinan Zhong Kuan"), entered into a Cooperation Agreement (the "Shandong Newspaper Cooperation Agreement") by and among itself, Shandong Broadcast & TV Weekly Press and Modern Movie & TV Biweekly Press, each PRC companies (collectively "Shandong Newspaper"). The Shandong Newspaper Cooperation Agreement provided for, among other terms, the creation of a joint venture entity in the PRC, Shandong Lushi Media Co., Ltd. ("Shandong Media") that would own and operate Shandong Newspaper's television program guide, newspaper and magazine publishing business in the Shandong region of the PRC (the "Shandong Newspaper Business") which businesses were previously owned and operated by the Shandong Newspaper entities pursuant to exclusive licenses. We believe that this acquisition will be completed soon and we have begun sending payments for the purchase price of this business interest.

Under the terms of the Shnadong Newspaper Cooperation Agreement and related transaction documents, the Shandong Newspaper entities mentioned above will contribute their entire Shandong Newspaper Business and transfer certain employees, to Shandong Media in exchange for a 50% stake in Shandong Media, with the other 50% of Shandong Media to be owned by our Jinan Zhong Kuan operating subsidiary. In exchange therefore, the Cooperation Agreement provides for total initial consideration on the part of Jinan Zhong Kuan of approximately $1.5 million (approximately 10 million RMB based on exchange rates at the time) which shall be contributed to Shandong Media as working and acquisition capital, of which the Company has already paid approximately $300,000 (approximately 2 million RMB ) in early March 2008 as a down payment.

In addition to the initial purchase price of $1.5 million (10 million RMB), the Shandong Newspaper Cooperation Agreement provides for additional consideration of approximately US $757,757 and US $3,000,000 (between 5 million RMB and 20 million RMB, respectively, based on exchange rates at the time) to be paid as a capital contribution to Shandong Media in the event that certain performance thresholds are met during the first 12 months of operations after closing the transaction for a total maximum purchase price of approximately $4.06 (30 million RMB based on exchange rates at the time).. Specifically in the event that audited annual net profits during the first year after closing of the transaction relating to the Shandong Newspaper Cooperation Agreement:

· equals or exceeds 16 million RMB, then we will be required to contribute an additional 20 million RMB (or, approximately $3,000,000 based on current exchange rates) to the Shandong Media joint venture;

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

· is less then 4 million RMB, then only an additional 5 million RMB (approximately US $757,575 based on current exchange rates).

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

In addition, the Shandong Newspaper entities are required, at closing upon completion of all closing conditions, to enter into an Exclusive Advertising Agency Agreement and an Exclusive Consulting Services Agreement with Shandong Media which require that the Shandong Newspaper entities shall appoint Shandong Media as its exclusive advertising agent and provider of technical and management support for a fee.

The closing of the transaction is dependant upon, among other conditions, the obtaining of all necessary PRC government consents, payment of the initial purchase price set forth above, and entry into the Exclusive Advertising Agency Agreement and Exclusive Consulting Service Agreement.

Additional information relating to the Shandong Newspaper Business can be found at the end of the "Recent Developments" subsection of "Item 1. Description of Business" above.

Results of Operations

The Company was a development stage company with no business operations during the year ended December 31, 2006 ("2006"). Operating activity during 2006 relates to the formation of our China Broadband Cayman subsidiary, its entry into agreements to acquire Jinan Broadband and related due diligence, raising capital for the same, and the interest expense associated with its $325,000 principal amount of 7% Convertible Promissory Notes issued on September 22, 2006.

Effective January 23, 2007 we acquired China Broadband Cayman and its operations which was already a party to a Cooperation Agreement to acquire PRC based Jinan Broadband. Effective April 1, 2007, China Broadband Cayman, Inc. and our WFOE, completed the acquisition of the Jinan Broadband subsidiary. During 2006 Jinan Broadband did not operate as its own separate entity and constituted assets within a business division that was separated out immediately prior to our acquisition. Accordingly, increases in revenues, profits and expenses for the year ended December 31, 2007 were primarily attributable to the commencement of operations of the newly acquired assets which are operating independently for the first time. Accordingly, Jinan Broadband results for the year ended December 31, 2006 were not included for comparative purposes as management believes that they are not meaningful.

Our revenues are based on the number of paying cable broadband internet customers in the Shandong province of China. As of December 31, 2007, Jinan Broadband had approximately 58,000 active paying subscribers for its services in this region as compared to 45,000 in 2006. The increase is a result of increased efforts on internal growth by Jinan Broadband after our acquisition of them. Management believes that there are a total of 1.3 million homes that are estimated to have cable access in the Jinan region of Shandong, approximately 80% of which already have cable access and 20% have internet access in some form. (See, www.jinan.gov.cn).

Our gross revenues are dependent on several factors:

. . .