SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

FORM 10-Q

(Mark One)

x	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934.

For the quarterly period ended September 30, 2008

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

For the transition period from ________ to ________

Commission file number: 000-33483

CHINA MOBILE MEDIA TECHNOLOGY INC.

(Exact Name of Registrant as Specified in Its Charter)

Nevada		88-0496645
(State or Other Jurisdiction of Incorporation or Organization)		(I.R.S. Employer Identification No.)

10th Floor, Block C, Intell-Center

No. 18 Zhongguancun East Road

Haidian District

Beijing, China 100083

(Address of Principal Executive Offices)

+ 86 10 8260 1927

(Former Name, Former Address and Former Fiscal Year, if Changed Since Last Report)

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. Yes x No o

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

Large accelerated filer o	Accelerated filer o

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

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o No x

As of November 18, 2008, there were 60,494,384 shares of the issuer’s common stock, par value $0.001 per share, outstanding.

TABLE OF CONTENTS

			Page
PART I.			1
FINANCIAL INFORMATION

Item 1. Condensed Consolidated Financial Statements			1
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations			23
Item 3. Quantitative and Qualitative Disclosures about Market Risk			28
Item 4. Controls and Procedures			28
PART II.			29
OTHER INFORMATION

Item 1. Risk Factors			29
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds			30
Item 3. Defaults Upon Senior Securities			30
Item 4. Submission of Matters to a Vote of Security Holders			30
Item 5. Other Information			30
Item 6. Exhibits			30

PART I. FINANCIAL INFORMATION

Item 1. Condensed Consolidated Financial Statements

CHINA MOBILE MEDIA TECHNOLOGY INC.

(FORMERLY HI-TECH WEALTH INC.)

AND SUBSIDIARIES

CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIODS ENDED SEPTEMBER 30, 2008 AND 2007 (UNAUDITED)

CONTENTS

PAGE	2	CONDENSED CONSOLIDATED BALANCE SHEETS AS OF SEPTEMBER 30, 2008 (UNAUDITED) AND DECEMBER 31, 2007

PAGE	3-4	CONDENSED CONSOLIDATED STATEMENTS OF (LOSS) INCOME AND COMPREHENSIVE (LOSS) INCOME FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2008 AND 2007 (UNAUDITED)

PAGES	5	CONDENSED CONSOLIDATED CASH FLOWS STATEMENTS FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2008 AND 2007 (UNAUDITED)

PAGES	6-22	NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIODS ENDED SEPTEMBER 30, 2008 AND 2007 (UNAUDITED)

CHINA MOBILE MEDIA TECHNOLOGY INC.

(FORMERLY HI-TECH WEALTH, INC.)

AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

ASSETS	September 30, 2008		December 31, 2007
	(Unaudited)
CURRENT ASSETS

Cash and cash equivalents	$	327,890	$	300,224
Accounts receivable		8,698,765		11,413,957
Notes receivable		5,634,804		5,408,806
Inventories		2,172,748		7,385,441
Due from related parties		11,077,995		146,909
Advance to suppliers		5,792,040		6,012,788
Debt issue costs				468,208
Other receivables, prepaid expenses and other assets		991,150		1,929,898
Total current assets		34,695,391		33,066,231
LONG-TERM ASSETS
Plant and equipment, net		16,328,600		16,085,217
Land use right and other intangible assets, net		2,660,854		2,285,904
Long-term investment		4,000		4,000
Goodwill		0		4,240,842
Total long-term assets		18,993,454		22,615,963

TOTAL ASSETS	$	53,688,845	$	55,682,194

LIABILITIES AND SHAREHOLDERS’ EQUITY(DEFICIT)
CURRENT LIABILITIES
Accounts payable	$	12,754,405		$	9,333,376
Other payables and accrued liabilities		4,396,646			3,445,546
Short-term bank loans		3,593,170			3,144,611
Current portion of long-term loans					1,093,778
Secured notes, net of discount of $1,132,399 at December 31, 2007					8,867,601
Notes payable					2,191,333
Unearned revenue		4,501,235			3,783,680
Due to related parties		6,943,185			561,275
Taxes payable		(547,194	)
Salaries and welfare payable		266,014			115,719
Liquidated damages payable		1,765,750			1,445,750
Differed tax liabilities					117,245
Total current liabilities		33,673,210			34,099,914
LONG-TERM LIABILITIES
Long-term bank loans		5,675,902			4,744,261
Global notes, net of discount of $2,074,225 at September 30, 2008		19,102,651			-
Warrants		90,000
Differed tax liabilities					136,149
Total long-term liabilities		24,868,553			4,880,410
TOTAL LIABILITIES		58,541,763			38,980,324

SHAREHOLDERS’ EQUITY(DEFICIT)
Series B Preferred stock, stated value $50,000 per share; authorized 300 shares, 286.15 and 288.65 shares issued and outstanding at September 30, 2008 and December 31, 2007, respectively		14,307,500			14,432,500
Common stock, par value $0.001 per share; authorized 280,000,000 shares, 60,494,384 and 59,394,615 shares issued and outstanding at September 30, 2008 and December 31, 2007, respectively		60,935			59,395
Additional paid-in capital		21,461,971			20,574,138
Accumulated deficit		(44,057,755	)		(20,142,287	)
Accumulated other comprehensive income		3,374,430			1,778,124
TOTAL SHAREHOLDERS’ EQUITY(DEFICIT)		(4,852,919	)		16,701,870
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY(DEFICIT)	$	53,688,845		$	55,682,194

See accompanying notes to the condensed consolidated financial statements.

CHINA MOBILE TECHNOLOGY INC.

(FORMERLY HI-TECH WEALTH, INC.)

AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF (LOSS) INCOME

AND COMPREHENSIVE (LOSS) INCOME

(UNAUDITED)

	Three Months Ended September 30,						Nine Months Ended September 30,
	2008			2007			2008			2007

REVENUES, NET	$	(900,661	)	$	11,600,815		$	884,267		$	49,882,145

COST OF GOODS SOLD		(1,451,122	)		8,401,458			(254,500	)		34,286,648

GROSS PROFIT		550,461			3,199,357			1,138,767			15,595,497

Selling and distribution		182,988			1,627,476			539,330			3,144,481

Advertising		39,297			1,623,716			319,438			5,254,556

Research and development		82,577			932,568			339,205			1,721,620

General and administrative		2,439,018			2,453,049			7,548,024			5,753,775

Allowance for obsolete and slow moving inventories		1,266,051						8,617,194

Goodwill Impairment		4,230,509						4,230,509

LOSS FROM OPERATIONS		(7,689,979	)		(3,437,452	)		(20,454,933	)		(278,935	)

OTHER INCOME (EXPENSES)
Interest income (expense), net		(156,361	)		(478,120	)		(161,590	)		(1,055,672	)

Non cash interest expense from amortization of discount on global and secured notes		(515,719	)		(687,338	)		(3,052,942	)		(3,038,780	)

Amortization of debt issue costs for secured notes

Government grants		88,619			95,860			455,507			323,985

Value added tax refund					199,201						1,107,211

Loss from foreign exchange transactions		(24,085	)					(-24,309	)

Other income (expense), net		(192,658	)		236,000			(211,221	)		274,684

Total Other income (Expenses)		(800,204	)		(634,397	)		(2,994,555	)		(2,388,572	)

LOSS FROM CONTINUING OPERATIONS BEFORE INCOME TAXES AND MINORITY INTERESTS		(8,490,183	)		(4,071,849	)		(23,449,488	)		(2,667,507	)

INCOME TAXES BENEFIT (EXPENSE)		(3,162	)		1,141,664			(298,393	)		246,445

LOSS FROM CONTINUING OPERATIONS BEFORE MINORITY INTERESTS		(8,487,021	)		(2,930,185	)		(23,151,095	)		(2,913,952	)

MINORITY INTERESTS SHARE OF LOSS (INCOME)											(99,259	)

LOSS FROM CONTINUING OPERATIONS		(8,487,021	)		(2,930,185	)		(23,151,095	)		(3,013,211	)

DISCONTINUED OPERATIONS

Gain from disposition of discontinued operations		-			59,483			-			122,995

Loss from discontinued operations					(162	)					(1,527	)

NET GAIN (LOSS) FROM DISCONTINUED OPERATIONS					59,321						121,468

NET LOSS		(8,487,021	)		(2,870,864	)		(23,151,095	)		(2,891,743	)

Dividend to preferred share holders								764,373

LOSS INCOME TO COMMON SHAREHOLDERS		(8,487,021	)		(2,870,864	)		(23,915,468	)		(2,891,743	)

OTHER COMPREHENSIVE INCOME
Foreign currency translation gain		134,996			268,583			1,596,306			881,581

OTHER COMPREHENSIVE INCOME BEFORE INCOME TAXES		134,996			268,583			1,596,306			881,581

Income tax related to other comprehensive income					(40,287	)					(132,237	)

OTHER COMPREHENSIVE INCOME, NET OF INCOME TAXES		134,996			228,296			1,596,306			749,344

COMPREHENSIVE LOSS	$	(8,352,025	)	$	(2,642,568	)	$	(22,319,162	)	$	(2,142,399	)

See accompanying notes to the condensed consolidated financial statements.

CHINA MOBILE MEDIA TECHNOLOGY INC.

(FORMERLY HI-TECH WEALTH, INC.)

AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF (LOSS) INCOME

AND COMPREHENSIVE (LOSS) INCOME

(UNAUDITED)

	Three Months Ended September 30,						Nine Months Ended September 30,
	2008			2007			2008			2007

Weighted average shares outstanding
- Basic		60,271,594			59,113,937			60,494,384			51,956,327
- Diluted		60,271,594			59,113,937			60,494,384			51,956,327

Income (loss) per share from continuing operations
- Basic	$	(0.14	)	$	(0.05	)	$	(0.40	)	$	(0.05	)
- Diluted	$	(0.14	)	$	(0.05	)	$	(0.40	)	$	(0.05	)

Net gain (loss) per share from discontinued operations
- Basic	$	(0.00	)	$	(0.00	)	$	(0.00	)	$	(0.01	)
- Diluted	$	(0.00	)	$	(0.00	)	$	(0.00	)	$	(0.01	)

Net income (loss) per share
- Basic	$	(0.14	)	$	(0.05	)	$	(0.40	)	$	(0.06	)
- Diluted	$	(0.14	)	$	(0.05	)	$	(0.40	)	$	(0.06	)

See accompanying notes to the condensed consolidated financial statements.

CHINA MOBILE MEDIA TECHNOLOGY INC.

(FORMERLY HI-TECH WEALTH, INC.) AND SUBSIDIARIES

CONDENSED CONSOLIDATED CASH FLOWS STATEMENTS

(UNAUDITED)

	Nine Months Ended September 30,
	2008			2007
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$	(23,151,095	)	$	(2,891,743	)
Adjustments to reconcile net loss to net cash used by operating activities:
Depreciation and amortization		716,521			927,790
Amortization of discounts to notes		1,132,399			3,038,780
Amortization of notes receivable discount		(182,883	)
Adjustment of FV of warrants		(311,741	)		310,560
Amortization of debt issue cost		1,920,543
Deferred taxes					40,396
Provision for obsolete and slow moving inventories, doubtful accounts and goodwill		16,405,684			542,438
Minority interests’ share of net income					99,259
Net gain on discontinued operations					(121,467	)

Changes in operating assets and liabilities, net of effects of acquisition:

(Increase) Decrease In:
Accounts receivable		(618,846	)		(16,556,177	)
Inventories		(3,544,779	)		6,797,797
Other receivables, prepaid expenses, and other assets		1,479,207			424,140
Prepayments for goods		220,748			(7,706,875	)
Due from employees					(139,368	)
Discontinued operations					(221,885	)

Increase (Decrease) In:
Accounts payable		3,421,029			6,983,931
Other payables and accrued liabilities		(850,801	)		(127,829	)
Salaries and welfares payable		80,862			69,453
Taxes payable		(761,044	)		(533,265	)
Unearned revenues		717,554			795,731
Discontinued operations					71,801
Net cash used in operating activities		(3,326,641	)		(8,196,533	)

CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of plant and equipment		(13,828	)		(564,954	)
Repayment for notes receivable		(43,115	)		(4,882,098	)
Discontinued operations					7,396
Proceeds from disposal of subsidiaries, net of cash disposed					263,965
Net cash used in investing activities		(56,943	)		(5,190,483	)

CASH FLOWS FROM FINANCING ACTIVITIES:
Repayments of short-term bank loans		(64,766	)		(2,148,614	)
Repayments for long-term bank loans		(302,148	)
Proceeds from notes payable					57,785
Repayments for notes payable					(259,078	)
Repayments for secured notes, net		(10,000,000	)
Proceeds from global notes		20,661,157
Advances from related parties		6,381,910			18,618,153
Repayment to related parties		(10,931,085	)		(17,624,092	)
Proceeds from issuance of preferred stock					7,250,000
Issuance cost of Global Notes		(2,609,100	)
Proceeds from issuance of secured notes					9,016,233
Net cash used by financing activities		(3,135,968	)		14,910,387

NET INCREASE IN CASH AND CASH EQUIVALENTS		(247,616	)		1,523,371

Effect of exchange rate changes on cash		275,280			2,471,370
Cash and cash equivalents at beginning of period		300,224			220,909
CASH AND CASH EQUIVALENTS AT END OF PERIOD	$	327,890		$	4,215,650

SUPPLEMENTARY CASH FLOW INFORMATION:
Interest paid	$	630,551		$	605,958
Income taxes paid				$	$757,353

See accompanying notes to the condensed consolidated financial statements.

CHINA MOBILE MEDIA TECHNOLOGY INC.

(FORMERLY HI-TECH WEALTH, INC.) AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE PERIODS ENDED SEPTEMBER 30, 2008 AND 2007 (UNAUDITED)

1. ORGANIZATION AND PRINCIPAL ACTIVITIES

Before acquiring Magical Insight Investments Limited (“MIL”), the principal activity of China Mobile Media Technology Inc. and its subsidiaries (the “Company”) was to provide broadband technology for the “last mile” market. The Company’s products were produced by original equipment manufacturers (“OEM”) and sold under the “General Components” and “Reachhome” brands. The Company also developed plastic optical fiber (“POF”) cable technology and related networking equipment. The Company filed patents in the USA and Asia on its proprietary POF technology, related manufacturing process and production machinery. The POF global market did not develop as rapidly as the Company anticipated and the Company deferred the commercialization and launch of POF products and reduced research and development of POF.

Prior to acquiring MIL, while searching for a new business direction, the Company developed a product line of Voice Over Internet Protocol (“VOIP”) to provide the voice communication services within the internet environment. However, since the Company did not have sufficient financial resources to fully develop its new VOIP business, on September 8, 2006, the Company, via its subsidiary, General Components Inc, (“GCI Cayman”), a Cayman Islands corporation, entered into an Asset Purchase Agreement (“APA”) for the sale of its VOIP business. The agreement provided for the sale of the Company’s VOIP business for consideration of $0.The transaction described by the APA closed on November 6, 2006.

On December 22, 2006, the Company entered into an asset purchase agreement with General Components International Limited, a British Virgin Islands company. Pursuant to the agreement the Company agreed to sell all of its interest in the business operations of and its 100% equity interest (including the first installment received, the second and the third installments to be received along with all the other assets and liabilities) in General Components Inc, (“GCI Cayman”), a Cayman Islands corporation, and its subsidiaries, to a third party for $1. GCI Cayman was the 100% ultimate holding company of General Components, Inc., a New Jersey corporation, General Components Limited, a Hong Kong corporation, and General Components, Inc., a China corporation.

Going forward, the Company intends to carry out the business of MIL and its primary operating subsidiary, Beihai Hi-Tech Wealth Technology Development Co., Ltd. (“HTW”). HTW is a provider of electronic and mobile communication products in the People’s Republic of China (the “PRC”).

On October 27, 2006, MIL acquired 100% equity interest of Euro Asia Arbitrage Investment Limited (“Euro Asia”), a Hong Kong corporation, for HK$100,000, equivalent to US$12,838. Euro Asia is investment holding company, which owns 100% of Beijing Hi-Tech Wealth Software Co., Limited. As a result, Euro Asia and its subsidiary were consolidated into the accompanying consolidated financial statements for 2006.

On November 28, 2006, MIL increased its ownership in HTW through an additional investment of $3,600,000. On February 12, 2007 and March 19, 2007, MIL increased its ownership in HTW through an additional investment of $4,500,000 and $320,513, respectively.

On February 13, 2007, the Company completed a 1 for 10 reverse split of its outstanding common stock. As a result, all the amounts in the accompanying consolidated financial statements for the years ended December 31, 2007 have been restated to give effect to the 1 for 10 reverse split.

On March 27, 2007, MIL acquired the remaining interest from the minority interest holders of HTW for 3,000,000 shares of the Company’s common stock. Thereafter, HTW became a 100% owned subsidiary of MIL. Also see Note 19.

On June 13, 2007, HTW entered into an agreement to sell its 90% interest on Beihai Hi-Tech Wealth Electronic Products Co., Ltd (“HEP”), a 90% subsidiary of HTW, to BJ HID for $237,554. The transaction was approved by the PRC Government and consummated on July 3, 2007.

On October 29, 2007, MIL entered into an agreement to sell its 100% interest on Euro Asia Arbitrage Investment Limited (“Euro Asia”) to a third party for $12,838. Subject to the disposal, the subsidiary of Euro Asia, Beijing Hi-Tech Wealth Software Co., Limited, was also disposed. As a result, Euro Asia and its subsidiary are reported as discontinued operations.

CHINA MOBILE MEDIA TECHNOLOGY INC.

(FORMERLY HI-TECH WEALTH, INC.) AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE PERIODS ENDED SEPTEMBER 30, 2008 AND 2007 (UNAUDITED)

2. GOING CONCERN

The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. The Company has cash and cash equivalents of $327,890 on September 30, 2008, has a net loss of $23,151,095 and $2,891,743 and a negative cash flow from operations of $3,326,641and $8,196,533 for nine months ended September 30, 2008 and 2007, respectively, and has a retained deficit of $44,057,755 and $20,142,287 at September 30, 2008 and December 31, 2007, respectively.

On February 8, 2007, the Company raised $13,250,000 in a private placement in the form of a sale of shares of Series A, convertible preferred stock. On January 11, 2008, MIL sold in a private placement of $20,661,157 (RMB150,000,000) principal amount of 9.5% per annum global notes due January 10, 2014 (the “Global Notes”), with common stock purchase warrants, granted by the Company, to purchase 12,000,000 shares of the Company’s common stock at an exercise price of $2.00 per share (the “Exercise Price”), exercisable any time after January 1, 2008 through June 30, 2014. See Note 12.

The Company will need to obtain additional financing in addition to the funds already raised through the sale of equity securities to fund our cash needs and continue our operations beyond March 2009. Additional financing, whether through public or private equity or debt financing, arrangements with stockholders or other sources to fund operations, may not be available, or if available, may be on terms unacceptable to us. Our ability to maintain sufficient liquidity is dependent on our ability to raise additional capital. If we issue additional equity securities to raise funds, the ownership percentage of our existing stockholders would be reduced. New investors may demand rights, preferences or privileges senior to those of existing holders of our common stock. Debt incurred by us would be senior to equity in the ability of debt holders to make claims on our assets. The terms of any debt issued could impose restrictions on our operations. If adequate funds are not available to satisfy either medium or long-term capital requirements, our operations and liquidity could be materially adversely affected and we could be forced to cut back our operations.

3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

These accompanying consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America ("US GAAP") and pursuant to the rules and regulations of the securities and exchange commission (SEC) for annual financial statements.

(a) Principles of Consolidation

The consolidated financial statements include the accounts of China Mobile Media Technology Inc. and the following subsidiaries:

(i)

Magical Insight Investments Limited (“MIL”) (100% subsidiary of the Company).

(ii)

Beihai Hi-Tech Wealth Technology Development Co., Ltd (“HTW”) (100% subsidiary of MIL).

(iii)

Beijing Hi-Tech Wealth Communication Technology Co., Limited (“BJ HCT”) (100% subsidiary of MIL).

(iv)

Beijing Hi-Tech Super Net Technology Co., Litmited (“BJ HST”) (100% subsidiary of MIL).

Inter-company accounts and transactions have been eliminated in consolidation.

CHINA MOBILE MEDIA TECHNOLOGY INC.

(FORMERLY HI-TECH WEALTH, INC.) AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE PERIODS ENDED SEPTEMBER 30, 2008 AND 2007 (UNAUDITED)

3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

(b)

Cash and cash equivalents are carried at cost and represent cash on hand, demand deposits placed with banks or other financial institutions and all highly liquid investments with an original maturity of three months or less as of the purchase date of such investments.

(c)

Accounts receivable are recorded at the invoiced amounts and do not bear interest. The Company extends unsecured credit to its customers in the ordinary course of business but mitigates the associated risks by performing credit checks and actively pursuing past due accounts. An allowance for doubtful accounts is established and determined based on managements’ assessment of known requirements, aging of receivables, payment history, the customer’s current credit worthiness and the economic environment. As of September 30, 2008 and December 31, 2007, the Company had accounts receivable of $ 8,698,765 and $11,413,957 respectively.

Accounts receivable are as follows:

	September 30, 2008			December31, 2007
	(Unaudited)			(Audited)
Accounts receivable:	$	17,694,359		$	17,075,513
Less: allowance for doubtful accounts	$	(8,995,594	)	$	(5,661,556	)
Total accounts receivable, net	$	8,698,765		$	11,413,957

(d)

Inventory is valued at the lower of cost or market. Inventory consists of raw material, packages, consigned progress material, semi-finished goods cost, finished goods and estimated goods returned. Cost of semi-finished and finished goods comprises direct material, direct production cost and an allocated portion of production overheads. Valuation method of inventory is FIFO. See note 5 for details.

(e)

Plant and equipment are stated at net. Expenditures for maintenance and repairs are expensed as incurred; additions, renewals and betterments are capitalized. When Plant and equipment are retired or otherwise disposed of, the related cost and accumulated depreciation are removed from the respective accounts, and any gain or loss is included in operations. Depreciation of plant and equipment is provided using the straight-line method over the estimated lives ranging from five to forty years as follows:

Building	25-40 years
Machinery	5-10 years
Motor vehicle	5 years
Office Equipment	5-25 years

Also see note 7

(f)

Impairment of long-life assets

In accordance with statement of financial accounting standard (SFAS) No. 144, "Accounting for the Impairment or Disposal of Long-Lived Assets," the Company reviews its long-lived assets, including plant and equipment, machinery, motor vehicle, office equipment, for impairment whenever events or changes in circumstances indicate that the carrying amounts of the assets may not be fully recoverable. If present value of the expected undiscounted future net cash flows is less than the carrying amount of the asset, a loss is recognized for the difference between the fair value and carrying amount of the asset. Due to accumulated loss of the Company of US$44,057,755 as of September 30, 2008, the delay in the rolling-out of new products with premium features and uncertainty in future operations, the Company has decided, to recognize a loss of US$4,240,842, corresponding to the carrying amount of the goodwill.

(g) Use of Estimates

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

Management makes these estimates using the best information available at the time the estimates are made. Actual results could differ materially from those estimates.

CHINA MOBILE MEDIA TECHNOLOGY INC.

(FORMERLY HI-TECH WEALTH, INC.) AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE PERIODS ENDED SEPTEMBER 30, 2008 AND 2007 (UNAUDITED)

3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

(h)

Fair Value of Financial Instruments

The Company’s financial instruments include cash and cash equivalents, accounts receivable, notes receivable, due to/from related parties, other receivables and prepaid expenses, due from/to employees, prepayments for goods, accounts payable, notes payables, short-term bank loans, other payables and accrued liabilities, taxes payable and unearned revenues. Management has estimated that the carrying amount approximates fair value due to their short-term nature.

(i)

Government Grants

Grants received from the PRC Government for assisting the Company’s improvement and development are recognized as other income when the proceeds are earned and received or collectible.

For the three months ended September 30, 2008 and 2007, $88,619 and $95,860 were received as grants from the PRC Government, and were recognized as other income.

For the nine months ended September 30, 2008 and 2007, $455,507 and $323,985 were received as grants from the PRC Government, and were recognized as other income.

(j)

Foreign Currency Translation

The accompanying consolidated financial statements are presented in United States dollars. The functional currency of the Company is the Renminbi (RMB). The consolidated financial statements are translated into United States dollars from RMB at year-end exchange rates as to assets and liabilities and average exchange rates as to revenues and expenses. Capital accounts are translated at their historical exchange rates when the capital transactions occurred.

	September 30, 2008		December 31, 2007		September 30, 2007
Period end RMB: US$ exchange rate		6.8183		7.3141		7.5108
Period average RMB: US$ exchange rate		6.9832		7.5658		7.5632

(k)

Revenue Recognition

Revenue related to smart phone and electronic products represents the invoiced value of goods sold recognized upon the delivery of goods to customers. According to the contracts, goods delivered by the Company can be returned within 7 days, if there is any defect. The Company estimates a reserve for returns based on the amount of goods actually returned after the reporting period.

Revenue is recognized when all of the following criteria are met:

- Persuasive evidence of an arrangement exists,

- Delivery has occurred or services have been rendered, when no subsequent return is noted,

- The seller’s price to the buyer is fixed or determinable,

- Collectibility is reasonably assured.

Revenue related to software products represents the invoiced value of software sold recognized only when the software is installed into the assembled hardware devices. The Company does not have any further obligation to service the software once it is installed into the hardware devices.

CHINA MOBILE MEDIA TECHNOLOGY INC.

(FORMERLY HI-TECH WEALTH, INC.) AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE PERIODS ENDED SEPTEMBER 30, 2008 AND 2007 (UNAUDITED)

(l) Earnings (Loss) Per Share

Basic earnings (loss) per share are computed by dividing income available to common shareholders by the weighted-average number of common shares outstanding during the period. Diluted earnings per share is computed similar to basic earnings (loss) per share except that the denominator is increased to include the number of additional common shares that would have been outstanding if the potential common shares had been issued and if the additional common shares were dilutive. No potentially dilutive securities are included in loss per share in the nine months ended September 30, 2008, as their effect would be anti-dilutive.

Basic and diluted (loss) income per share are calculated as follows:

	Three Months Ended September 30						Nine Months Ended September 30
	2008			2007			2008			2007
	(Unaudited)			(Unaudited)			(Unaudited)			(Unaudited)
Basic and diluted:
Income(loss) applicable to common shareholders	$	(8,487,021	)	$	(2,870,864	)	$	(23,915,468	)	$	(2,891,743	)

Weighted average shares outstanding during the period		60,271,594			59,113,937			60,494,384			51,956,327

Net income(loss) per share	$	(0.14	)	$	(0.05	)	$	(0.40	)	$	(0.06	)

CHINA MOBILE MEDIA TECHNOLOGY INC.

(FORMERLY HI-TECH WEALTH, INC.) AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE PERIODS ENDED SEPTEMBER 30, 2008 AND 2007 (UNAUDITED)

3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

(m) Adoption of New Accounting Policy

In September 2006, the Financial Accounting Standard Board (“FASB”) issued SFAS No. 157, “Fair Value Measurements,” which provides enhanced guidance for using fair value to measure assets and liabilities. SFAS No. 157 provides a common definition of fair value and establishes a framework to make the measurement of fair value in generally accepted accounting principles more consistent and comparable. SFAS No. 157 also requires expanded disclosures to provide information about the extent to which fair value is used to measure assets and liabilities, the methods and assumptions used to measure fair value, and the effect of fair value measures on earnings. SFAS No. 157 is effective for financial statements issued in fiscal years beginning after November 15, 2007 and to interim periods within those fiscal years. The adoption of SFAS No. 157 did not have an impact on the Company’s financial statements.

In February 2007, the FASB issued SFAS No. 159, The Fair Value for Financial Assets and Financial Liabilities. This Statement permits entities to choose to measure financial assets and liabilities, with certain exceptions, at fair value at specified election dates. A business entity shall report unrealized gains and losses on items for which the fair value option has been elected in earnings at each subsequent reporting date. This Statement is effective as of the beginning of an entity’s first fiscal year that begins after November 15, 2007. The adoption of SFAS No. 159 did not have an impact on the Company’s financial statements. In December 2007, the FASB issued SFAS No. 160, Non controlling Interests in Consolidated Financial Statements. This Statement establishes accounting and reporting standards that require the ownership interests in subsidiaries’ non-parent owners be clearly presented in the equity section of the balance sheet; requires the amount of consolidated net income attributable to the parent and to the non controlling interest be clearly identified and presented on the face of the consolidated statement of income; requires that changes in a parent’s ownership interest while the parent retains its controlling financial interest in its subsidiary be accounted for consistently; requires that when a subsidiary is deconsolidated, any retained non controlling equity investment in the former subsidiary be initially measured at fair value and the gain or loss on the deconsolidation of the subsidiary be measured using the fair value of any non controlling equity; requires that entities provide disclosures that clearly identify the interests of the parent and the interests of the non controlling owners. This Statement is effective as of the beginning of an entity’s first fiscal year that begins after December 15, 2008. The Company has not determined the impact, if any, SFAS No. 160 will have on its financial statements.

In December 2007, the FASB issued SFAS No. 141 (R), Business Combinations, and SFAS No.160, Non-controlling Interests in Consolidated Financial Statements. SFAS No. 141 (R) requires an acquirer to measure the identifiable assets acquired, the liabilities assumed, and any non-controlling interest in the acquire at their fair values on the acquisition date, with goodwill being the excess value over the net identifiable assets acquired. SFAS No.160 clarifies that a non-controlling interest in a subsidiary should be reported as equity in the consolidated financial statement. The calculation of earnings per share will continue to be based on income amounts attributable to the parent. SFAS No.141 (R) and SFAS No.160 are effective for financial statements issued for fiscal years beginning after December 15, 2008. Early adoption is prohibited. We have not yet determined the effect on our consolidated financial statements, if any, upon adoption of SFAS No.141 (R) or SFAS No. 160. We are aware that our accounting for minority interest will change and we are considering those effects now but believe the effects will only be a reclassification of minority interest from mezzanine equity to our stockholder's equity section in the balance sheet, in any case we do not believe the implementation of SFAS 160 will be material to our financial position, SFAS 141(R) will significantly affect the accounting for future business combinations and we will determine the accounting as new combinations are determined.

CHINA MOBILE MEDIA TECHNOLOGY INC.

(FORMERLY HI-TECH WEALTH, INC.) AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE PERIODS ENDED SEPTEMBER 30, 2008 AND 2007 (UNAUDITED)

4. NOTES RECEIVABLE

Notes receivable consisted of the following:

	September 30, 2008			December 31, 2007
	(Unaudited)			(Audited)
Notes receivable from unrelated companies:
Beihai University Garden Management Co. Ltd., due December 31, 2008	$	380,624		$	346,454
Beijing yaxingshidai Science and Technology Co. Ltd.	$	8,800		$	13,672
Total	$	389,424		$	360,126

Notes receivable from related companies:
Union Perfect Limited.	$	2,834,643		$	2,826,098
Hong Kong Hi-Tech Wealth Electronic Products Co. Ltd.	$	2,467,086		$	2,459,648
Total	$	5,301,728		$	5,285,746

Less: Notes receivable discount	$	(56,348	)	$	(237,066	)
Total notes receivable, net	$	5,634,804		$	5,408,806

Notes receivable from unrelated companies are interest-free, unsecured and all current.

Interest-free notes were provided to related parties for their assistance in developing distribution channels and new markets for the Company. The Company recorded a discount of $56,348 on notes receivable of $5,301,728 based on the present value of notes receivable using a 7% rate. In 2008, $477,696 of interest income was recognized in the accompanying consolidated statements of income from the amortization of the discount.

Also see Note 6 for related parties disclosures.

CHINA MOBILE MEDIA TECHNOLOGY INC.

(FORMERLY HI-TECH WEALTH, INC.) AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE PERIODS ENDED SEPTEMBER 30, 2008 AND 2007 (UNAUDITED)

5. INVENTORIES

Inventories consist of the following:

	September 30, 2008			December 31, 2007
	(Unaudited)			(Audited)
Raw materials	$	3,840,637		$	3,562,003
Finished goods		8,320,535			4,907,439
		12,161,172			8,469,442
Less: Allowance for slow moving inventories		(9,988,425	)		(1,084,001	)
Inventories, net	$	2,172,748		$	7,385,441

6. DUE TO/FROM RELATED PARTIES

(I) Due From Related Parties		September 30, 2008		December 31, 2007
		(Unaudited)		(Audited)
Beijing Hi-Tech Wealth Electronic Product Co. Ltd.	(a)	$	7,493,521	$	139,204
Beihai Hi-Tech Wealth Information Industry Co. Ltd.	(b)		1,590,068		4,415
Beijing Hi-Tech Wealth Technology Development Co. Ltd.	(c)				3,290
Beijing Mobil XP Technology Co. Ltd	(e)		830,812
HK HEP	(f)		225,262
Profit Power Ltd	(g)		885,597
Beijing HTW Investment and Development Ltd	(d)		5224
Others			47,516
Total due from related parties		$	11,077,999	$	146,909

(II) Due To Related Parties		September 30, 2008		December 31, 2007
		(Unaudited)		(Audited)
Beijing Hi-Tech Wealth Electronic Product Co Ltd	(a)	$	1,295,842	$
Beijing Hi-Tech Wealth Investment and Development Co. Ltd.	(d)		1,486,734		3,333
Beijing Mobil XP Technology Co. Ltd.	(e)		257,516		522,086
Union Perfect	(n)		256,120
Beihai Hi-Tech Wealth Electronic Product Selling Co. Ltd.	(h)		1,072,666		35,856
Hi-Tech Wealth Holding Co. Ltd	(i)		23,039
HTW (Tongxiang) Electronic Tech. Ltd	(j)		1,260,134
Jiangsu HTW Tech. Dev. Ltd	(k)		4,400
HT Intellectual Property Rights Management Consulting Co. Ltd	(l)		11,733
Beihai Hi-Tech Wealth Electronic Product Co Ltd	(m)		38,555
Beijing HTW Tech and Dev.Ltd	(c)		1,189,513
Beijing HTW Communication and Tech Ltd	(o)		46,931
Total due to related parties		$	6,943,185	$	561,275

(a)	Beijing Hi-Tech Wealth Electronic Product Co. Ltd (“BJ HEP”) is controlled by a director of the Company. During nine months ended September 30.2008, HTW purchased raw materials and goods from BJ HEP. The remaining balance of $6,197,679 is interest free, unsecured and has no fixed repayment term. BJ HEP will supply imported raw materials to HTW.
(b)	Beihai Hi-Tech Wealth Information Industry Co. Ltd. (“BH HII”) has a common director with MIL. The amount represents the expenses paid on behalf of BH HII during During nine months ended September 30.2008. The remaining balance of $1,590,068 is interest free, unsecured and has no fixed repayment term.

(c)	Beijing Hi-Tech Wealth Technology Development Co., Ltd. has a common director with MIL. The remaining balance of $1,189,513 as of September 30, 2007 represents expenses paid on behalf of the company during the period, which are interest free, unsecured and have no fixed repayment term.

(d)

Beijing Hi-Tech Wealth Investment and Development Co. Ltd. (“BJ HID”) was a minority shareholder of HTW, now controlled by the director of MIL. The amount of $1,481,510 represents expenses paid on behalf of the company during the period. The remaining balance is interest free, unsecured and has no fixed repayment term.

(e)

Beijing Mobil XP Technology Co., Ltd (“BMT”) is a company controlled by the director of MIL. The remaining balance of $573,296 at September 30, 2008 and December 31, 2007 represent advance paid to and payable to BMT, respectively. The remaining balance is interest free, unsecured and has no fixed repayment term.

(f)	HK Hi-Tech Wealth Electronic Products Co., Ltd is a company controlled by the director of MIL. The amount of $225,262 represents an advance on behalf of the Company during the period. The remaining balance is interest free, unsecured and has no fixed repayment term.

(g)	Profit Power Ltd is a company controlled by a director of MIL. The amount of $885,597 represents an advance for purchasing in overseas during the period. The remaining balance is interest free, unsecured and has no fixed repayment term.

(h)	Beihai Hi-Tech Wealth Electronic Product Selling Co. Ltd. (“BH HPS”) is a company controlled by a director of MIL. The amount of $1,072,666 represents expenses paid on behalf of the Company during the period. The remaining balance is interest free, unsecured and has no fixed repayment term.

(i)	Hi-Tech Wealth Holding Co. Ltd. is a company controlled by a director of MIL. The remaining balance of $23,039 at September 30, 2008 represents an advance and expenses paid on behalf of the Company. The remaining balance is interest free, unsecured and has no fixed repayment term

(j)	HTW (Tongxiang) Electronic Tech. Ltd is a company controlled by a director of MIL. The remaining balance of $1,260,134 at September 30, 2008 represents an advance and expenses paid on behalf of the Company. The remaining balance is interest free, unsecured and has no fixed repayment term

(k)	Jiangsu HTW Tech. Dev. Ltd is a company controlled by a director of MIL. The remaining balance of $4,400 at September 30, 2008 represents an advance and expenses paid on behalf of the Company. The remaining balance is interest free, unsecured and has no fixed repayment term

(l)	HT Intellectual Property Rights Management Consulting Co. Ltd is a company controlled by a director of MIL. The remaining balance of $11,733 at September 30, 2008 represents an advance and expenses paid on behalf of the Company. The remaining balance is interest free, unsecured and has no fixed repayment term

(m)	Beihai Hi-Tech Wealth Electronic Product Co Ltd is a company controlled by a director of MIL. The remaining balance of $38,555 at September 30, 2008 represents an advance and expenses paid on behalf of the Company. The remaining balance is interest free, unsecured and has no fixed repayment term

(n)	Union Perfect Limited is a company controlled by a director of MIL. The remaining balance of $256,120 at September 30, 2008 represents an expenses paid on behalf of the Company. The remaining balance is interest free, unsecured and has no fixed repayment term.

(o)	Beijing HTW Communication and Tech Ltd is a company controlled by a director of MIL. The balance at September 30, 2008 represents an expenses paid on behalf of the Company. The remaining balance of $46,931 is interest free, unsecured and has no fixed repayment term.

CHINA MOBILE MEDIA TECHNOLOGY INC.

(FORMERLY HI-TECH WEALTH, INC.) AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE PERIODS ENDED SEPTEMBER 30, 2007 AND 2007 (UNAUDITED)

7. PLANT AND EQUIPMENT

Plant and equipment consisted of the following:

	September 30, 2008		December 31, 2007
		(Unaudited)		(Audited)
At cost:
Buildings	$	15,342,148	$	14,302,151
Machinery		3,738,770		3,331,587
Motor vehicles		198,269		184,829
Office equipment		473,879		367,941
Other equipment		-		651,415
		19,753,066		18,837,923
Less: Accumulated depreciation
Buildings		1,492,624		1,182,825
Machinery		1,554,328		1,181,670
Motor vehicles		128,960		96,121
Office equipment		248,553		142,139
Other equipment		-		149,951
		3,424,465		2,752,706
Plant and equipment, net	$	16,328,600	$	16,085,217

The net book value of buildings pledged for certain bank loans at September 30, 2008 and December 31, 2007 is $13,849,524 and $10,985,374, respectively. Also see Note 10 and 11.

8. LAND USE RIGHT

	September 30, 2008		December 31, 2007
	(Unaudited)		(Audited)
Cost	$	2,984,135	$	2,521,217
Less: Accumulated amortization		323,281		235,313
Land use right, net	$	2,660,854	$	2,285,904

Amortization expense for the next five years and thereafter is as follows:

2008	$	14,921
2009		59,683
2010		59,683
2011		59,683
2012		59,683
Thereafter		2,407,202
Total	$	2,660,835

The net book value of the land use right pledged for certain bank loans at September 30, 2008 and December 31, 2007 is $2,660,835 and $2,285,904, respectively. Also see Notes 10 and 11.

CHINA MOBILE MEDIA TECHNOLOGY INC.

(FORMERLY HI-TECH WEALTH, INC.) AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE PERIODS ENDED SEPTEMBER 30, 2007 AND 2007 (UNAUDITED)

9. GOODWILL

On March 27, 2007, MIL acquired from Beijing Hi-Tech Wealth Investment and Development Company Limited (“BJ HID”), the minority owners of HTW, their remaining interest in HTW. The acquisition cost was 3,000,000 shares of the Company’s common stock valued at the closing share price of $2.01 on March 27, 2007, when the transaction was approved by the PRC Government and consummated. The total stock value was $6,030,000.

The accompanying consolidated financial statements include the allocation of the acquisition cost to the net assets acquired based on their respective fair values. The fair value of net assets acquired was $1,789,158, and total consideration paid was $6,030,000. The excess of acquisition cost over the consideration paid was recognized as goodwill of $4,240,842.

Due to accumulated loss of the Company of US$44,057,755 as of September 30, 2008, the delay in the rolling-out of new products with premium features and uncertainty in future operations, the Company has decided, to recognize a loss of US$4,240,842, corresponding to the carrying amount of the goodwill.

10. SHORT-TERM DEBT

At September 30, 2008 and December 31, 2007, short-term debt consisted of the following:

	September 30, 2008		December 31, 2007
	(Unaudited)		(Audited)
Industrial and Commercial Bank of China, Nanzhu Branch, outstanding principal of RMB7,000,000, due December 26, 2008, monthly interest only payments at 9.712% per annum, secured by the building and land use right of the Company. Also see Notes 7 and 8.	$	879,985	$	1,093,778
Unpaid portion of long term bank loans reclassified as current liabilities.		513,324

Agricultural Bank of China, Beihai Branch, outstanding principal of Rmb15,000,000, due September 11, 2008, monthly interest only payments at 8.424% per annum, secured by a land use right of the Company. Also see Note 7.		2,199,861		2,050,833

Total short-term bank loans	$	3,593,170	$	3,144,611

At the end of September 30 2008, maturity principal of US$439,992 and US$2,199,861 of ICBC and ABC was not repaid due to lack of working capital. The two banks and the Company are negotiating an agreement to postpone the due date for repayment.

CHINA MOBILE MEDIA TECHNOLOGY INC.

(FORMERLY HI-TECH WEALTH, INC.) AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE PERIODS ENDED SEPTEMBER 30, 2007 AND 2007 (UNAUDITED)

11. LONG-TERM BANK LOANS

At September 30, 2008 and December 31, 2007, the long-term bank loans consisted of the following:

	September 30, 2008			December 31, 2007
	(Unaudited)			(Audited)
Industrial and Commercial Bank of China, Nanzhu Branch, outstanding principal of Rmb42,700,000, at an interest rate of 8.093% per annum, secured by the building and a land use right of HTW. The loan is due on December 31, 2010. Also see Notes 7 and 8.	$	6,189,226		$	5,838,039

Less: Current portion		(513,324	)		(1,093,778	)

Long-term portion	$	,5,675,902		$	4,744,261

At the end of September 30 2008, maturity principal of US$513,324 was not repaid due to lack of working capital . Industrial and Commercial Bank of China and the Company are negotiating an agreement to postpone the due date for repayment.

The long-term bank loan is due as follows:

Year Ending December 31,	Amount
2008	$	1,173,313
2009		1,466,641
2010		3,622,604
	$	6,262,558

CHINA MOBILE MEDIA TECHNOLOGY INC.

(FORMERLY HI-TECH WEALTH, INC.) AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE PERIODS ENDED SEPTEMBER 30, 2007 AND 2007 (UNAUDITED)

12.

GLOBAL NOTES

Global notes outstanding are as follows:

	September 30, 2008
	(Unaudited)
Issued on January 11, 2008, outstanding principal of RMB150,000,000 (US$20,661,157), net of discount of $1,558,506	$	19,102,651

On January 11, 2008, the Company sold in a private placement of $20,661,157 (Rmb150,000,000) principal amount of 9.5% per annum global notes (the “Global Notes”) subject to increase by an additional 5% per annum in the event that the Company’s common stock is not listed on a recognized stock exchange by January 12, 2009, with common stock purchase warrants to purchase 12,000,000 shares of the Company’s common stock at an exercise price of $2.00 per share (the “Exercise Price”), exercisable any time after January 11, 2008 through June 30, 2014.

The arrangement fee, issuing cost and value of warrants of $3,010,841 was recognized as discount on the notes and are amortized over the life of notes using the effective interest rate method which is 10.997%. For the three months and nine months ended September 30, 2008, $515,719 and $1,452,335 of amortization of discount on notes was recorded as interest expense, respectively.

The Exercise Price of the Company’s common stock warrants shall be subject to a contingent downward price adjustment on the six month anniversary of the issuance date and upon the expiration of each subsequent six month period (each, a “Reset Date”), such that if the volume weighted average closing price per share of common stock for the 20-trading day period immediately prior to the applicable Reset Date is less than the then applicable Exercise Price (such lower volume weighted average closing price, the “Reset Exercise Price”), the Exercise Price shall automatically be changed to the Reset Exercise Price; provided, however, that notwithstanding the foregoing, in no event shall the Reset Exercise Price be less than $0.80 per share (as adjusted proportionally for stock dividends, stock splits, combinations, recapitalizations and the like).

On the first Reset Date, July 11, 2008, the closing price per share of our common stock was$0.10. The volume weighted average for the 20 trading days immediately prior to the Reset Date is $0.076. So the warrant is evaluated with exercise price set at the floor value of $0.80.

The fair value of the Warrants of $401,741 at the issuance date was determined using the Black-Scholes option-pricing model with the following assumptions:

Risk free interest rate	3.375	%
Expected life	6.5 years
Expected volatility	35.57	%
Expected dividend yield	0	%

However, the stock price on September 30, 2008 was significantly lower than that on January 11, 2008. The new fair value of the Warrants of $90,000 was determined with new volatility at 121% and expected life of 6.0 years.

This fair value of the warrants is classified as a liability and the change in values are recorded as charge or credit to interest expense. The reset feature will be capped at $0.80 per share on July 11, 2008.

Holders of the notes are entitled to the protection of certain customary covenants, including limitations on the Company’s ability to incur additional debt or liens on any Company property, limitations on asset sales, payments of dividends, and certain types of restricted payments, a limitation on the Company’s ability to pledge capital stock of any subsidiaries and a limitation on senior management’s ability to transfer shares. The Company must, from the first anniversary of issuance of the Notes, maintain a fixed charge coverage ratio, for the four fiscal quarters, of at least 3.5 to 1.00, a leverage ratio for the four fiscal quarters, not exceeding 4.0 to 1.00. The Notes are mandatorily redeemable in tranches beginning on the third anniversary of the issuance. In addition, the Company is obligated to repurchase the securities in the event of a change of control, sales of significant assets or a delisting of the Company’s common stock at purchase prices of 105%, 100% and 105%, respectively, of the principal amount. Additionally, the Company has agreed to file a resale registration statement for the shares of common stock issuable upon exercise of the Warrants. The principal shareholders of the Company have also entered into arrangements with Abax Lotus Ltd. that grant broad management veto rights in favor of Abax Lotus Ltd. Abax Lotus Ltd. received an arrangement fee of $2,000,000 and a service fee of $150,000 in connection with the financing.

The principal has a series of partial mandatory redemptions as followings:

Date Amount	Percentage of Principal
January 11, 2011		10	%
July 11, 2011		10	%
January 11, 2012		20	%
July 11, 2012		20	%
January 11, 2013		20	%
July 11, 2013		10	%
January 10, 2014		10	%

The interest will be paid on semi-annual basis from July 11, 2009 based on the principal outstanding.

CHINA MOBILE MEDIA TECHNOLOGY INC.

(FORMERLY HI-TECH WEALTH, INC.) AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE PERIODS ENDED SEPTEMBER 30, 2007 AND 2007 (UNAUDITED)

13. INCOME TAXES

(a) Corporation Income Tax (“CIT”)

In 2006, HTW applied to the local tax authority for a favorable corporate income tax rate of 15% for companies registered in the coastal economic zone of PRC, which was approved in December 2006. As a result, the corporate income tax rate applicable to HTW was changed from 24% to 15%.

According to the relevant taxation laws in the PRC, HTW is entitled to a 50% tax reduction from 2005 to 2007 with 7.5%. BJ HCT and BJ HST are subsidiaries of MIL, and their applicable CIT rate is 25% in 2008.

Effective January 1, 2007, the Company adopted FASB Interpretation No. 48, Accounting for Uncertainty in Income Taxes ("FIN 48"). — AN INTERPRETATION OF SFAB NO. 109, ACCOUNTING FOR INCOME TAXES. The Interpretation addresses the determination of whether tax benefits claimed or expected to be claimed on a tax return should be recorded in the financial statements. Under FIN 48, we may recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The tax benefits recognized in the financial statements from such a position should be measured based on the largest benefit that has a greater than fifty percent likelihood of being realized upon ultimate settlement. FIN 48 also provides guidance on derecognition, classification, interest and penalties on income taxes, accounting in interim periods and requires increased disclosures. As of September 30, 2008 and December 31, 2007, the Company does not have a liability for unrecognized tax benefits.

The Company filed certain tax returns in China. As of September 30, 2008 and December 31, 2007 the Company was not aware of any pending income tax examinations by China tax authorities. The Company's policy is to record interest and penalties on uncertain tax provisions as income tax expense. As of September 30, 2008 and December 31, 2007, the Company has no accrued interest or penalty related to uncertain tax positions.

Under the new CIT law, the corporate income tax rate applicable to the Company starting from January 1, 2008 is 25%, replacing the current applicable tax rate of 33%. The Company believes some of the tax concession granted to eligible companies prior to the new CIT law will be grandfathered. The new CIT Law has an impact on the deferred tax assets and liabilities of the Company. The Company expects they will get the approval of 15% favorable rate from 2008 to 2010, because HTW is located in western zero. Effects arising from the enforcement of the new CIT Law are reflected into the accounts by best estimation method.

In April 2008, one of the Company’s subsidiaries, Beijing HCT, was verified by the government as a Sino-Foreign Joint Venture. Pursuant to the Chinese income tax law, Beijing HCT, became fully exempt from income tax for two years from its inception January 2007 to December 2008, followed by a reduced tax rate for the next three years. Concurrent with the exemption, the tax authorities waived approximately $295,231 in taxes due.

The effect of the change of tax status has been accounted for in accordance with SFAS No. 109, par. 28, which states that the effect of a change in tax status is computed as of the date of change and is included in the tax provision for continuing operations. Management believes that the local tax authorities would not have waived past taxes had it not been for the change in the Company’s subsidiary’s tax status.

If Beijing HCT had not been exempt from paying income taxes as described above, income tax expense for the nine months ended September 30, 2008 would have been approximately $295,231 and loss per share would have been instead to ($0.34).

CHINA MOBILE MEDIA TECHNOLOGY INC.

(FORMERLY HI-TECH WEALTH, INC.) AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE PERIODS ENDED SEPTEMBER 30, 2007 AND 2007 (UNAUDITED)

13. INCOME TAXES(CONTINUED)

Income tax expense for the three months ended September 30, 2008 and 2007 is summarized as follows:

	Three months ended September 30
	2008			2007
	(Unaudited)			(Unaudited)
Current:
CIT	$	(3,162	)	$	(234,452	)

Deferred:
CIT	$			$	1,352,395

Income tax benefit (expense)	$	(3,162	)	$	1,117,943

Income tax expense for the nine months ended September 30, 2008 and 2007 is summarized as follows:

	Nine months ended September 30
	2008			2007
	(Unaudited)			(Unaudited)
Current:
CIT	$	(298,393	)	$	(286,841	)

Deferred:
CIT	$			$	40,396

Income tax benefit (expense)	$	(298,393	)	$	(246,445	)

(b) Value Added Tax

Enterprises or individuals who sell commodities, engage in repair and maintenance or import or export goods in the PRC are subject to a value added tax in accordance with Chinese Laws. The value added tax standard rate is 17% of the gross sales price. A credit is available whereby VAT paid on the purchases of semi-finished products or raw materials used in the production of the Company’s finished products can be used to offset the VAT due on the sales of the finished products.

The VAT payable of ($477,219) and $113,794 at September 30, 2008 and December 31, 2007, respectively, is included in taxes payable in the accompanying condensed consolidated balance sheets.

For the nine months ended September 30, 2008 and 2007, $70,096 and $1,107,211 were received as VAT refund from the PRC Government, which was recognized as subsidy income.

CHINA MOBILE MEDIA TECHNOLOGY INC.

(FORMERLY HI-TECH WEALTH, INC.) AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE PERIODS ENDED SEPTEMBER 30, 2007 AND 2007 (UNAUDITED)

14. SHAREHOLDERS’ EQUITY

Conversion of Series B Preferred Stock into Common Stock

During the nine months ended of September 30, 2008, 2.5 shares of Preferred Stock were converted into 125,000 shares of Common Stock of the Company.

15. WARRANTS

	Warrants Granted		Weighted Average Exercise Price
Outstanding as of December 31, 2007		5,106,250		1.613
Granted		12,000,000		0.8
Exercised
Cancelled
Outstanding as of September 30, 2008		17,106,250	$	1.043

(a) Warrants Granted to Financial Advisors

According to the executed financial advisory agreements signed February 5, 2007, the Company issued 1,250,000 warrants to purchase common stock within 3 years from the date of issuance to financial advisors as compensation for their financial advisory services from February 8, 2007 to February 7, 2010. The warrants are forfeitable and were valued at $1,597,164 using the Black-Scholes option-pricing model with the following assumptions:

Risk free interest rate	4.70	%
Expected life	3 years
Expected volatility	35.59	%
Expected dividend yield	0	%

$133,097 and $221,828 of financial advisory fees was recognized as general and administrative expenses and additional paid-in capital in the nine months ended September 30, 2008 and 2007, respectively.

(b) Warrants Granted to Global notes holders

On January 11, 2008, the Company granted warrants of 12,000,000 to the global notes holders for issuance of global notes. The warrants are non-forfeitable and were valued at $401,741 using the Black-Scholes option-pricing model with the following assumptions:

Risk free interest rate	3.375	%
Expected life	6.5 years
Expected volatility	35.57	%
Expected dividend yield	0	%

Also see Note 12.

CHINA MOBILE MEDIA TECHNOLOGY INC.

(FORMERLY HI-TECH WEALTH, INC.) AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE PERIODS ENDED SEPTEMBER 30, 2007 AND 2007 (UNAUDITED)

16. SEGMENT INFORMATION

The Company operates two segments for the three months ended September 30, 2008. The two segments in 2008 are the development, production and distribution of mobile phone products and mobile application software within China. The software business was started from the end of 2006 after the acquisition of the software company, Beijing Hi-Tech Wealth Software Co., Ltd. and later on carried out by Beijing Hi-Tech Wealth Communication Technology Co., Limited (“BJ HCT”) (100% subsidiary of MIL) since the end of 2007. The Company’s segment information for 2008 is as follows:

	Smart Phone			Software			Corporate			Consolidated
Three Months Ended September 30, 2008 (Unaudited)
Revenue	$	(1,616,665	)	$	716,004		$			$	(900,661	)
Operating expenses		4,320,070			(260,869	)		6,921,294			10,980,495
Operating income (loss)	$	(4,740,073	)	$	976,873		$	(6,921,294	)	$	(10,684,494	)

Three Months Ended September 30, 2007 (Unaudited)
Revenue	$	9,523,922		$	2,011,808		$			$	11,535,730
Advertising		1,362,203			261,513						1,623,716
Other operating expenses		3,025,373			1,666,694			313,071			5,005,138
Operating income (loss)	$	(3,908,208	)	$	665,906		$	(1,130,253	)	$	(4,372,565	)

	Smart Phone		Software		Corporate		Consolidated
September 30, 2008 (Unaudited)
Identifiable assets	$	48,987,110	$	2,807,922	$	1,893,814	$	53,688,845

December 31, 2007
Identifiable assets	$	46,936,438	$	2,690,378	$	1,814,536	$	51,441,352

The Company operates two segments for the nine months ended September 30, 2008. The two segments in 2008 are the development, production and distribution of mobile phone products and mobile application software within China. The software business was started from the end of 2006 after the acquisition of the software company, Beijing Hi-Tech Wealth Software Co., Ltd. and later on carried out by Beijing Hi-Tech Wealth Communication Technology Co., Limited (“BJ HCT”) (100% subsidiary of MIL) since the end of 2007. The Company’s segment information for 2008 is as follows:

	Smart Phone			Software			Corporate			Consolidated
Nine Months Ended September 30, 2008 (Unaudited)
Revenue	$	168,263		$	716,004		$			$	884,267
Operating expenses		15,456,643			1,025,182			7,851,930			24,333,755
Operating income (loss)	$	(15,288,380	)	$	(309,178	)	$	(7,851,930	)	$	(23,449,488	)
Nine Months Ended September 30, 2007 (Unaudited)
Revenue	$	43,859,261		$	6,022,884		$			$	49,882,145
Advertising		4,993,043			261,513						5,254,556
Other operating expenses		6,122,389			3,324,234			1,173,251			10,619,874
Operating income (loss)	$	(2,005,773	)	$	3,918,288		$	(4,580,022	)	$	(2,667,507	)

	Smart Phone		Software		Corporate		Consolidated
September 30, 2008 (Unaudited)
Identifiable assets	$	48,987,110	$	2,807,922	$	1,893,814	$	53,688,845

December 31, 2007
Identifiable assets	$	46,936,438	$	2,690,378	$	1,814,536	$	51,441,352

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

NOTE REGARDING FORWARD-LOOKING STATEMENTS

Except for the historical information contained herein, the matters discussed in this “MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS,” and elsewhere in this report are forward-looking statements that involve risks and uncertainties. The factors listed in the section captioned “RISK FACTORS,” as well as any cautionary language in this report, provide examples of risks, uncertainties and events that may cause our actual results to differ materially from those projected. Except as may be required by law, we undertake no obligation to update any forward-looking statement to reflect events after the date of this report. The following discussion should be read in conjunction with our consolidated financial statements and the notes thereto included elsewhere in this Quarterly Report on Form 10-Q.:

You should read the following discussion together with the more detailed business information and consolidated financial statements and related notes that appear elsewhere in this Quarterly Report on Form 10-Q. This Quarterly Report on Form 10-Q may contain certain “forward-looking” information within the meaning of the Private Securities Litigation Reform Act of 1995. In some cases, you can identify forward-looking statements by our use of words such as “may,” “will,” “should,” “could,” “expect,” “plan,” “intend,” “anticipate,” “believe,” “estimate,” “predict,” “potential” or “continue” or the negative or other variations of these words, or other comparable words or phrases. This information involves risks and uncertainties. Our actual results may differ materially from the results discussed in the forward-looking statements.

Critical Accounting Policies and Estimates

Our significant accounting policies are disclosed in our Annual Report on Form 10-KSB for the year ended December 31, 2007, which was filed with the Securities and Exchange Commission. Our significant accounting policies have not materially changed since December 31, 2007.

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

New Accounting Pronouncements

In September 2006, the FASB issued SFAS No. 157, "Fair Value Measurements," which provides enhanced guidance for using fair value to measure assets and liabilities. SFAS No. 157 provides a common definition of fair value and establishes a framework to make the measurement of fair value in generally accepted accounting principles more consistent and comparable. SFAS No. 157 also requires expanded disclosures to provide information about the extent to which fair value is used to measure assets and liabilities, the methods and assumptions used to measure fair value, and the effect of fair value measures on earnings. SFAS No. 157 is effective for financial statements issued in fiscal years beginning after November 15, 2007 and to interim periods within those fiscal years. The Company is currently in the process of evaluating the effect, if any, the adoption of SFAS No. 157 will have on its consolidated results of operations, financial position, or cash flows.

In February 2007, the FASB issued FASB Statement No. 159, The Fair Value Option for Financial Assets and Financial Liabilities — including an amendment of FASB Statement No. 115 (“FAS 159”). FAS 159, which becomes effective for the Company on January 1, 2008. This standard permits companies to choose to measure many financial instruments and certain other items at fair value and report unrealized gains and losses in earnings. Such accounting is optional and is generally to be applied instrument by instrument. The Company does not anticipate that election, if any, of this fair-value option will have a material effect on the

consolidated results or operations or financial position.

In December 2007, the FASB issued SFAS No. 141 (R), Business Combinations, and SFAS No.160, Non-controlling Interests in Consolidated Financial Statements. SFAS No. 141 (R) requires an acquirer to measure the identifiable assets acquired, the liabilities assumed, and any non-controlling interest in the acquired entity at their fair values on the acquisition date, with goodwill being the excess value over the net identifiable assets acquired. SFAS No.160 clarifies that a non-controlling interest in a subsidiary should be reported as equity in the consolidated financial statement. The calculation of earnings per share will continue to be based on income amounts attributable to the parent. SFAS No.141 (R) and SFAS No.160 are effective for financial statements issued for fiscal years beginning after December 15, 2008. Early adoption is prohibited. We have not yet determined the effect on our consolidated financial statements, if any, upon adoption of SFAS No.141 (R) or SFAS No. 160. We are aware that our accounting for minority interest will change and we are considering those effects now but believe the effects will only be a reclassification of minority interest from mezzanine equity to our stockholder's equity section in the balance sheet; in any case, we do not believe the implementation of SFAS 160 will be material to our financial position. SFAS 141(R) will significantly affect the accounting for future business combinations and we will determine the accounting as new combinations are determined.

Business Overview

The Company operated in the mobile phone market for the third year in 2008. The mobile phone market have been very volatile since the end of 2007. While the Company managed to roll out four new products, they did not meet earnings expectation due to lack of innovative application and premium features.

Total approximately 2,607 units security mobile phones and approximately 4,561 solar mobile phones with solar jacket were sold in the three months period ended September 30, 2008. This represents a very low sales volume. The Company is encountering huge difficulties in rolling-out innovative products with premium functions due to insufficient working capital and this will last until the Company manages to get funding or to roll out an attractive product.

Business Outlook

The Company is strengthening in solar powered mobile phones. It is developing a second generation solar powered mobile phone with very high conversion efficiency.

The Company has successfully developed digital TV mobile phones based on the Chinese Standard; however, it is waiting for the network coverage which the Chinese Government postponed compared to the initial schedule. So far, no clear time table has been communicated by the Chinese Government.

On the marketing strategy, the Company is planning to combine TV-shopping and on-ground distribution channels. The TV-shopping landscape in China has dramatically changed and many TV stations are providing TV shopping services, so the Company plans to cooperate with diversified TV-shopping services providers.

Results of Operations

Three months ended September 30, 2008 Compared to three months ended September 30, 2007

Revenues. Revenues were ($900,661) for the three months ended September 30, 2008, as compared to $11,600,815 for the same period in 2007. This decrease is mainly due to return back by customers of the first solar powered mobile S116 with a serious quality deficiency. It is difficult for the Company to estimate the return back or when these returned units were sold, given the Company’s distributors bought this model over time, not at one specific time.

Gross profit. Gross profit was $550,461 in the three months ended September 30, 2008, as compared to $3,199,357 for the same period in 2007. This decrease was attributable to a decrease in sales volume together with the effect of lower margins.

Operating (loss) income. For the three months ended September 30, 2008, the operating loss was ($8,490,183) as compared to an operating income of ($4,071,849) for the same period in 2007. This decrease in operating income was due to increases in inventory provision for slow moving stock and impairment for goodwill, combined with significant reductions in sales.

Selling and distribution. Selling and distribution expenses were $182,988 for the three months ended September 30, 2008, as compared to $1,627,476 for the same period in 2007. This decrease was primarily attributable to a significant low market activity level after the quality deficiency for the first solar powered mobile phone S116 in 2007.

Advertising. Advertising of $39,297 was incurred for the three months ended September 30, 2008, as compared to $1,623,716 for the same period in 2007. The decrease is caused by low level market activities engaged by the Company due to lack of innovative new products after the failure of the first solar mobile phone S116 in 2007.

Research and development. Research and development costs of $82,577 were incurred for the three months ended September 30, 2008, as compared to $932,568 for the same period in 2007.

General and administrative. General and administrative expenses were $2,439,019 for the three months ended September 30, 2008, as compared to $2,453,049 for the same period in 2007.

	Three months Ended September 30, 2008		Three months Ended September 30, 2007		Increase/ (Decrease)			% Change
General and Administrative
Legal and professional fees	$	155,783	$	1,138,701	$	(982,918	)		(86.3	)%
Entertainment & traveling expenses		49,966		170,524		(120,558	)		(70.7	)%
Depreciation & amortization expense		233,204		179,853		53,351			29.7	%
Allowance for doubtful accounts		211,154		-		211,154
Salaries		313,257		510,760		(197,503	)		(38.7	)%
Other		1,475,655		453,211		1,022,444			225.6	%
Total	$	2,439,019	$	2,453,049	$	(14,030	)		(0.6	)%

Legal and Professional fees - These fees include audit fees, legal fees, consultancy fees, and financial advisory fees. During the three months ended September 30, 2008, the significant decrease was caused by non funding activities.

Other – The increase in other was mainly caused by mobile phone network permission test fees paid to Government agency.

Other expenses. Other expenses, net was $800,204 for the three months ended September 30, 2008, as compared to other income, net of $634,397 for the same period in 2007.

Allowance for obsolete and slow moving inventories. Allowance for obsolete and slow moving inventories of $1,266,051 were incurred for the three months ended September 30, 2008, as compared to $0 for the same period in 2007. The increase is caused mainly by inventory of solar powered mobile phones and components.

Moreover, there was a decrease in government grants and subsidies, from $295,061 of 2007 to $88,619 in the three months ended September 30, 2008.

Discontinued operations. The net gain/loss from discontinued operations was $0 for the three months ended September 30, 2008.

Income taxes. Income taxes were a benefit of $3,162 for the three months ended September 30, 2008, as compared to expense of $1,141,664 for the same period in 2007. The decrease was due to the decrease of sales volume and loss generated during the period ended September 30, 2008.

Net (loss) income. Net loss was $8,487,021 for the three months ended September 30, 2008, as compared to net income of $2,930,185 for the same period in 2007. This change was attributable to the factors discussed above.

For the three months ended September 30, 2008, basic net loss per share was $0.14.

Nine months ended September 30, 2008 Compared to nine months ended September 30, 2007

Revenues. Revenues were $884,267 for the nine months ended September 30, 2008, as compared to $49,882,145 for the same period in 2007. This 98.2% decrease is due to a delay in launching new products with premium features and innovative applications, declining unit sales and selling price of existing ISM models, call-back of the first solar mobile phone S116 and very keen competition in the mobile industry since the first quarter of 2008.

Gross profit. Gross profit was only $1,138,767 in the nine months ended September 30, 2008, as compared to $15,595,497 for the same period in 2007. This decrease was attributable to a decrease in sales volume.

Operating (loss) income. For the nine months ended September 30, 2008, the operating loss was $23,449,488 as compared to an operating income of $2,667,507 for the same period in 2007. This decrease in operating income was due to increases in inventory provision for slow moving stock and impairment for goodwill, combined with significant reductions in sales.

Selling and distribution. Selling and distribution expenses were $539,330 for the nine months ended September 30, 2008, as compared to $3,144,481 for the same period in 2007. This decrease was primarily attributable to a significant low market activity level after the quality deficiency for the first solar powered mobile phone S116 in 2007.

Advertising. Advertising of $319,438 were incurred for the nine months ended September 30, 2008, as compared to $5,254,556 for the same period in 2007, this decrease is caused by low level market activities engaged by the Company due to lack of innovative new products after the failure of the first solar mobile phone S116 in 2007.

Research and development. Research and development costs of $339,205 were incurred for the nine months ended September 30, 2008, as compared to $1,721,620 for the same period in 2007.

General and administrative. General and administrative expenses were $7,548,025 for the nine months ended September 30, 2008, as compared to $5,753,775 for the same period in 2007.

	Nine months Ended September 30, 2008		Nine months Ended September 30, 2007		Increase/ (Decrease)			% Change
General and Administrative
Legal and professional fees	$	1,242,241	$	1,631,853	$	(389,612	)		(23.88	)%
Entertainment & traveling expenses		262,170		545,556		(283,386	)		(51.94	)%
Depreciation & amortization expense		612,812		437,247		175,565			40.15	%
Allowance for doubtful accounts		2,853,344		-		2,853,344
Salaries		1,004,021		1,292,295		(288,274	)		(22.31	)%
Other		1,573,437		1,846,824		(273,387	)		(14.8	)%
Total	$	7,548,025	$	5,753,775	$	1,794,250			31.18	%

Legal and Professional fees - These fees include audit fees, legal fees, consultancy fees, and financial advisory fees.

Entertainment & traveling expenses - These expenses were incurred for the development of distribution networks throughout China.

Other expenses. Other expenses, net was $2,994,555 for the nine months ended September 30, 2008, as compared to other expenses, net of $2,388,572 for the same period in 2007. This increase is mainly caused by increase in currency exchange loss and decrease in Government grant.

Allowance for obsolete and slow moving inventories. Allowance for obsolete and slow moving inventories of $8,617,194 were incurred for the nine months ended September 30, 2008, as compared to $0 for the same period in 2007. The increase is caused mainly by inventory of solar powered mobile phones and components.

Moreover, there was a decrease in government grants and VAT refunded, from $1,135,788 of 2007 to $70,096 in the nine months ended September 30, 2008, which had an effect on subsidy income.

Discontinued operations. The net gain/loss from discontinued operations was $0 for the nine months ended September 30, 2008.

Income taxes. Income taxes were a benefit of $298,393 for the nine months ended September 30, 2008, as compared to expense of $246,445 for the same period in 2007. The decrease was due to the decrease of sales volume and loss generated for the period ended September 30, 2008.

Net (loss) income. Net loss was $23,151,095 for the nine months ended September 30, 2008, as compared to net income of $2,891,743 for the same period in 2007. This change was attributable to the factors discussed above.

For the nine months ended September 30, 2008, basic net loss per share was $0.40.

Concentrations

The Company had various customers for the three months ended September 30, 2008 and 2007 who accounted for the following percentage of total sales and total accounts receivable:

	Sales						Accounts Receivable
Major Customers	September 30, 2008			September 30, 2007			September 30, 2008			September 30, 2007

Company A		38.7	%					2.4	%
Company B		38.0	%					2.1	%
Company C					10.8	%
Company D					6.8	%
Company E					6.6	%
Company F					3.9	%
Company G					3.6	%

The sole market of the Company is the PRC for the periods ended September 30, 2008 and 2007.

The Company had various suppliers for the three months ended September 30, 2008 and 2007 who accounted for the following percentage of total purchases and total accounts payable:

	Purchases						Accounts Payable
Major Suppliers	September 30, 2008			September 30, 2007			September 30, 2008			September 30, 2007

Company A		36.9	%					0.04	%
Company B		34.7	%					0.06	%
Company C		11.5	%
Company D		6.7	%					0.01	%
Company E		2.5	%					0.02	%
Company F					36.8	%					43.7	%
Company H					16.2	%					30.2	%
Company I					6.9	%					15.8	%
Company J					5.8	%
Company K					5.4	%

Company I(HTW(tongxiang)Electronic technology Co,.Ltd)is a related party,which is controlled by a director of the Company.

The Company had various customers for the nine months ended September 30, 2008 and 2007 who accounted for the following percentage of total sales and total accounts receivable:

	Sales						Accounts Receivable
Major Customers	September 30, 2008			September 30, 2007			September 30, 2008			September 30, 2007

Company A		36.5	%					16.4	%
Company B		11.8	%
Company C		10.9	%					-
Company D		4.1	%					2.1	%		-
Company E		2.5	%					1.0	%
Company F					6.2	%
Company G					5.0	%					12.7	%
Company H					3.7	%
Company I					3.2	%					13.7	%
Company J					3.1	%					7.8	%

The sole market of the Company is the PRC for the periods ended September 30, 2008 and 2007.

The Company had various suppliers for the nine months ended September 30, 2008 and 2007 who accounted for the following percentage of total purchases and total accounts payable:

	Purchases						Accounts Payable
Major Suppliers	September 30, 2008			September 30, 2007			September 30, 2008			September 30, 2007

Company A		33.8	%					62.6	%
Company B		25.5	%					5.6	%
Company C		11.0	%					1.6	%
Company D		6.0	%
Company E		3.3	%					0.3	%
Company F					35.0	%					20.1	%
Company G					13.8	%
Company H					4.9	%					9.3	%
Company I					4.9	%					8.1	%
Company J					1.6	%

Liquidity and Capital Resources

As of September 30, 2008, we had $327,890 of cash and cash equivalents and $1,535,505 of working capital as compared to $300,224 of cash and cash equivalents and $1,033,683 of working capital deficiency, respectively, at December 31, 2007. Accounts receivable decreased to $8,698,765 at September 30, 2008 from $11,413,957 at December 31, 2007, as we entered into agreements certain preferred customers to extend the settlement period for both GSM and CDMA mobile distributors, from 90 days to 180 days, offset by an increase in accounts payable to $12,754,405 at September 30, 2008 from $9,333,376 at December 31, 2007. Prepayment for goods decreased to $5,792,040 at September 30, 2008 from $6,012,788 at December 31, 2007, which was mainly caused by lack of new products with premium features and innovative applications.

There was a net outflow of cash from operations of $3,326,641 in the nine months ended September 30, 2008 in comparison to $8,196,533 for the same period in 2007.

The cash provided by financing activities was decreased to $3,135,968 in the nine months ended September 30, 2008 in comparison to $14,910,387 for the same period in 2007.

The Company expects that it will generate sufficient funds from operations and fund raising activities to meet the required funds in the following 12 months’ operations.

Item 3. Quantitative and Qualitative Disclosures about Market Risk

Not required.

Item 4. Controls and Procedures

Conclusion Regarding the Effectiveness of Disclosure Controls and Procedures

We maintain “disclosure controls and procedures,” as such term is defined under the Exchange Act Rule 13a-15(e), that are designed to ensure that the information required to be disclosed in our Exchange Act reports is recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding the required disclosures. We have carried out an evaluation under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures as of September 30, 2008. Based upon their evaluation and subject to the foregoing, the Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective to ensure that required material information is included in this quarterly report for the period ended September 30, 2008.

Management’s Report on Internal Control Over Financial Reporting

Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Exchange Act Rules 13a-15(f) and 15d-15(f). Under the supervision and with the participation of our management, including our principal executive officer and principal financial officer, we conducted an evaluation of the effectiveness of our internal control over financial reporting based on the framework in Internal Control - Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on our evaluation, our principal executive officer and principal financial officer have concluded that during the period covered by this report, our internal controls over financial reporting were effective.

All internal control systems, no matter how well designed, have inherent limitations. Therefore, even those systems determined to be effective can only provide reasonable assurances with respect to financial statement preparation and presentation. In addition, any evaluation of effectiveness for future periods is subject to the risk that controls may become inadequate because of changes in conditions in the future.

Changes in Internal Control over Financial Reporting

There were no changes in our internal controls over financial reporting identified in connection with the evaluation that occurred during the quarter ended September 30, 2008 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Part II OTHER INFORMATION

Item 1.

Legal Proceedings

Not applicable.

Item 1A. Risk Factors

In addition to the other information in this quarterly report, our business is subject to numerous risks which should be considered carefully in evaluating our business and prospects.

Risks Related to Our Business

Going Concern

The accompanying consolidated financial statements have been prepared on the basis that the Company will continue as a going concern which assumes the realization of assets and settlement of liabilities in the normal course of business. Since its inception, the Company has been engaged in organizational and pre-operating activities. The Company has generated insignificant revenues and has incurred accumulated losses and negative operating cash flows of $23,151,095 and $3,326,641 , respectively, from December 31, 2007 (Inception) through September 30, 2008.

On February 8, 2007, the Company raised $13,250,000 in a private placement in the form of a sale of shares of Series A, convertible preferred stock (See Note 16). On January 11, 2008, MIL sold in a private placement of $20,661,157 (Rmb150,000,000) principal amount of 9.5% per annum global notes due January 10, 2014 (the “Global Notes”), with common stock purchase warrants, granted by the Company, to purchase 12,000,000 shares of the Company’s common stock at an exercise price of $2.00 per share (the “Exercise Price”), exercisable any time after January 1, 2008 through June 30, 2014.

Based on our current operating plan, we believe that we will need to obtain additional financing in addition to the funds already raised through the sale of equity securities to fund our cash needs and continue our operations in 2009. Additional financing, whether through public or private equity or debt financing, arrangements with stockholders or other sources to fund operations, may not be available, or if available, may be on terms unacceptable to us. Our ability to maintain sufficient liquidity is dependent on our ability to raise additional capital. If we issue additional equity securities to raise funds, the ownership percentage of our existing stockholders would be reduced. New investors may demand rights, preferences or privileges senior to those of existing holders of our common stock. Debt incurred by us would be senior to equity in the ability of debt holders to make claims on our assets. The terms of any debt issued could impose restrictions on our operations. If adequate funds are not available to satisfy either medium or long-term capital requirements, our operations and liquidity could be materially adversely affected and we could be forced to cut back our operations.

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

Not applicable.

Item 3.

Defaults Upon Senior Securities

Not applicable.

Item 4.

Submission of Matters to a Vote of Security Holders

No matter was submitted to a vote of security holders during the quarter ended September 30, 2008.

Item 5.

Other Information

None.

Item 6.

Exhibits

The following exhibits are furnished as part of the Quarterly Report on Form 10-Q:

Exhibit No.		Description
31.1		Certification of the Chief Executive Officer (Principal Executive Officer) pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2		Certification of the Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32		Certifications of the Chief Executive Officer (Principal Executive Officer) and the Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

SIGNATURES

In accordance with the requirements of the Securities Exchange Act of 1934, the registrant caused this report on Form 10-Q to be signed on its behalf by the undersigned, thereunto duly authorized.


	CHINA MOBILE MEDIA TECHNOLOGY INC.

Dated: November 19, 2008	By:	/s/ Zhang Zhengyu
		Name: Zhang Zhengyu Title: Chief Executive Officer and Chairman (Principal Executive Officer)


	CHINA MOBILE MEDIA TECHNOLOGY INC.

	By:	/s/ Ma Qing
		Name: Ma Qing Title: Chief Financial Officer and Treasurer (Principal Accounting and Financial Officer)

China Mobile Media Technology Inc. 10-Q