Attached files
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended December 31, 2010
o 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: 333-150952
China Media Inc.
(Exact name of registrant as specified in its charter)
|
Nevada
|
46-0521269
|
|
|
(State or other jurisdiction of incorporation or organization)
|
(I.R.S. Employer Identification No.)
|
12/F, Block D, Chang An Guo Ji
No. 88 Nan Guan Zheng Street
Beilin District, Xi'an City, Shaan'xi Province
China - 710068
(Address of principal executive offices)
(86) 298765-1114
(Registrants telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the preceding 12 months (or for such shorter period that the registrant was require to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes o No þ
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 Smaller reporting company þ
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o No þ
APPLICABLE ONLY TO CORPORATE ISSUERS
As of February 14, 2011, the registrant had 39,750,000 shares of common stock outstanding.
Table of Contents
|
2
|
|
|
2
|
|
|
3
|
|
|
6
|
|
|
6
|
|
|
7
|
|
|
7
|
|
|
7
|
|
|
7
|
|
|
7
|
|
|
7
|
|
|
7
|
1
The unaudited interim consolidated financial statements of China Media Inc. (the “Company”, “China Media”, “we”, “our”, “us”) follow. All currency references in this report are to U.S. dollars unless otherwise noted.
China Media Inc.
December 31, 2010
(Unaudited)
Financial Statement Index
|
Condensed Consolidated Balance Sheets as of December 31, 2010 and June 30, 2010 (Unaudited)
|
F-1
|
|
Condensed Consolidated Statements of Operations for the three and six months ended December 31, 2010 and 2009 (Unaudited)
|
F-2
|
|
Condensed Consolidated Statements of Cash Flows for the six months ended December 31, 2010 and 2009 (Unaudited)
|
F-3
|
|
Notes to the Condensed Consolidated Financial Statements (Unaudited)
|
F-4
|
2
CHINA MEDIA, INC.
Condensed Consolidated Balance Sheets
December 31, 2010
(Unaudited)
|
December 31,
2010
|
June 30,
2010
|
|||||||
|
Assets
|
||||||||
|
Current assets
|
||||||||
|
Cash
|
$
|
18,697
|
$
|
47,263
|
||||
|
Accounts receivable, net of allowance of $36,872 and $35,724 at December 31, 2010 and 2009, respectively
|
1,677,686
|
1,910,862
|
||||||
|
Total current assets
|
1,696,383
|
1,958,125
|
||||||
|
Fixed assets, net
|
58,911
|
68,588
|
||||||
|
Intangible assets, net
|
51,421
|
55,811
|
||||||
|
Film costs
|
1,858,740
|
1,785,939
|
||||||
|
Deposit
|
3,302,099
|
3,055,410
|
||||||
|
Total assets
|
$
|
6,967,554
|
$
|
6,923,873
|
||||
|
Liabilities and Stockholders' Equity
|
||||||||
|
Current liabilities
|
||||||||
|
Accounts payable
|
$
|
95,797
|
$
|
180,905
|
||||
|
Accrued liabilities
|
16,236
|
10,303
|
||||||
|
Short term debt
|
120,992
|
117,496
|
||||||
|
Due to related parties
|
119,834
|
281,645
|
||||||
|
Deferred revenue
|
226,860
|
-
|
||||||
|
Total current liabilities
|
579,719
|
590,349
|
||||||
|
Stockholders' equity
|
||||||||
|
Common stock, $0.00001 par value, 180,000,000 shares authorized; 39,750,000 shares issued and outstanding
|
398
|
398
|
||||||
|
Additional paid-in capital
|
13,972,839
|
8,748,246
|
||||||
|
Accumulated other comprehensive income
|
959,037
|
483,610
|
||||||
|
Accumulated deficit
|
(8,544,439
|
)
|
(5,267,950
|
)
|
||||
|
Total China Media Inc.'s stockholders' equity
|
6,387,835
|
3,964,304
|
||||||
|
Non-controlling interest
|
-
|
2,369,220
|
||||||
|
Total stockholders' equity
|
6,387,835
|
6,333,524
|
||||||
|
Total liabilities and stockholders' equity
|
$
|
6,967,554
|
$
|
6,923,873
|
||||
The accompanying notes are an integral part of these financial statements.
F-1
CHINA MEDIA INC.
Condensed Consolidated Statements of Operations
(Unaudited)
|
|
Three Months Ended
December 31,
|
Six Months Ended
December 31,
|
||||||||||||||
|
|
2010
|
2009
|
2010
|
2009
|
||||||||||||
|
Revenue
|
$
|
178,493
|
|
$
|
1,173,067
|
|
$
|
178,493
|
$
|
1,173,067
|
||||||
|
Cost of revenues
|
|
159,099
|
|
1,173,067
|
|
159,099
|
1,173,067
|
|
||||||||
|
Gross profit
|
19,394
|
-
|
19,394
|
-
|
||||||||||||
|
Selling, general and administrative
|
|
109,446
|
|
111,870
|
|
137,394
|
|
136,541
|
|
|||||||
|
Depreciation and amortization expense
|
|
8,700
|
|
15,621
|
|
17,291
|
|
31,221
|
|
|||||||
|
Total operating expenses
|
|
(118,146)
|
(127,491)
|
(154,685)
|
(167,762)
|
|||||||||||
|
Government subsidies/grants
|
25
|
2,982
|
||||||||||||||
|
Net loss
|
(98,727)
|
(127,491)
|
(132,309)
|
(167,762)
|
||||||||||||
|
Less: Net loss attributable to non-controlling interest
|
|
-
|
|
47,668
|
|
10,743
|
|
62,726
|
|
|||||||
|
Net loss attributable to China Media, Inc.
|
|
(98,727)
|
(79,823)
|
(121,566)
|
(105,036)
|
|||||||||||
|
Other comprehensive income (loss)
|
||||||||||||||||
|
Net loss
|
(98,727)
|
(127,491)
|
(132,309)
|
(167,762)
|
||||||||||||
|
Foreign currency translation
|
|
73,831
|
|
6,524
|
|
186,620
|
|
5,342
|
||||||||
|
|
||||||||||||||||
|
Comprehensive loss
|
|
(24,896)
|
(120,967
|
)
|
54,311
|
(162,420)
|
||||||||||
|
Less: comprehensive loss attributable to non-controlling interest
|
|
|
47,668
|
|
25,338
|
62,726
|
|
|||||||||
|
Comprehensive loss attributable to China Media, Inc.
|
|
$
|
(24,896)
|
$
|
(73,299
|
)
|
$
|
28,973
|
$
|
(99,694)
|
||||||
|
|
||||||||||||||||
|
Net loss per share basic and diluted
|
|
$
|
(0.00)
|
(0.00)
|
(0.00)
|
(0.00)
|
||||||||||
|
Weighted average number of shares outstanding basic and diluted
|
|
39,750,000
|
|
39,750,000
|
|
39,750,000
|
|
39,750,000
|
|
|||||||
The accompanying notes are an integral part of these financial statements
F-2
CHINA MEDIA INC.
Condensed Consolidated Statements of Cash Flows
(Unaudited)
|
Six Months Ended
December 31,
|
||||||||
|
2010
|
2009
|
|||||||
|
CASH FLOWS OPERATING ACTIVITIES
|
||||||||
|
Net loss
|
$
|
(132,309
|
)
|
$
|
(167,762
|
) | ||
|
Adjustments to reconcile net income (loss) to net cash provided by
|
||||||||
|
operating activities:
|
||||||||
|
Contributed Rent
|
-
|
5,868
|
||||||
|
Amortization expense
|
5,963
|
5,790
|
||||||
|
Depreciation expense
|
11,328
|
25,240
|
||||||
|
Changes in operating assets and liabilities
|
||||||||
|
Accounts receivable
|
285,219
|
)
|
(96,123
|
)
|
||||
|
Cash paid for film costs
|
(19,335
|
) |
(293,400
|
) | ||||
|
Accounts payable
|
(88,989
|
) | ||||||
|
Accrued expenses
|
5,515
|
(320
|
)
|
|||||
|
Deferred Revenue
|
226,860
|
-
|
||||||
|
Net cash provided by (used in) operating activities of operations
|
(294,252
|
)
|
(520,707
|
) | ||||
|
CASH FLOW INVESTING ACTIVITIES
|
||||||||
|
Cash paid for deposit
|
(153,191
|
)
|
||||||
|
Collections of note receivable
|
1,467,000
|
|||||||
|
Loans made to others
|
-
|
(4,452,345
|
)
|
|||||
|
Net cash used in investing activities
|
(153,191
|
)
|
(2,985,345
|
)
|
||||
|
CASH FLOW FINANCING ACTIVITIES
|
||||||||
|
Payments to (proceeds from) related parties
|
(170,191
|
) |
129,816
|
|||||
|
Net cash provided by (used in) financing activities
|
(170,191
|
) |
129,816
|
|||||
|
Effect of exchange rate changes on cash
|
564
|
5,551
|
||||||
|
NET CHANGE IN CASH
|
(28,566
|
)
|
(3,370,685
|
) | ||||
|
CASH AT BEGINNING OF PERIOD
|
47,263
|
3,375,449
|
||||||
|
CASH AT END OF PERIOD
|
$
|
18,697
|
$
|
4,764
|
||||
|
SUPPLEMENTAL INFORMATION:
|
||||||||
|
Interest paid
|
$
|
-
|
$
|
-
|
||||
|
Income taxes paid
|
$
|
676
|
$
|
-
|
||||
|
Non-Cash Transaction
|
||||||||
|
Short term debt offset accounts receivable
|
$
|
$
|
117,224
|
|||||
The accompanying notes are an integral part of these financial statements
F-3
CHINA MEDIA INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
December 31, 2010
1. Organization, Basis of Presentation and Significant Accounting Policies
The accompanying unaudited interim condensed consolidated financial statements of China Media, Inc. (“We” or the “Company”), have been prepared in accordance with accounting principles generally accepted in the United States of America and the rules of the Securities and Exchange Commission, and should be read in conjunction with the audited financial statements and notes thereto contained in the Company’s annual financial statements for the years ended June 30, 2010. In the opinion of management, all adjustments, consisting of normal recurring adjustments, necessary for a fair presentation of financial position and the results of operations for the interim periods presented have been reflected herein. The results of operations for interim periods are not necessarily indicative of the results to be expected for the full year. Notes to the condensed consolidated financial statements which would substantially duplicate the disclosure contained in the audited financial statements for the year ended June 30, 2010 included in this document have been omitted.
Share Exchange
On July 7, 2009, Fullead Overseas Limited, a company incoporated under the laws of the British Virgin Islands (the “Buyer”), entered into a share purchase agreement (the “Share Purchase Agreement”), pursuant to which the Buyer agreed to purchase a total of 32,500,000 shares of the Company’s common stock, representing 85% of the total issued and outstanding shares of common stock of the Company on a fully-diluted basis. Bin Li, the Company’s Director, is the owner and sole Director of the Buyer.
On September 16, 2009, the Company entered into a share exchange agreement (the “Share Exchange Agreement”) with Vallant Pictures Entertainment Co., Ltd., a company incorporated under the laws of the British Virgin Islands (“Vallant”) and Bin Li, the Company’s Director and the former sole shareholder of Vallant. According to the terms of the Share Exchange Agreement, the Company agreed to acquire the sole issued and outstanding common share of Vallant from Bin Li in exchange for 7,000 shares of the Company’s common stock.
China Media Inc. (the “Company”) formerly Protecwerx Inc., was incorporated in the State of Nevada on October 16, 2007. On November 30, 2009, the Company closed the transactions contemplated by the Share Exchange Agreement and acquired Vallant Pictures Entertainment Co., Ltd., a company incorporated under the laws of the British Virgin Islands (“Vallant”) as its wholly owned subsidiary. Vallant has entered into a series of contractual obligations with Xi’An TV Media Co., Ltd., a company incorporated under the laws of the People’s Republic of China (“Xi’An TV”) that is engaged in the business of producing and developing television programming for the Chinese market, as well as the holders of 62.61% of the voting shares of Xi’An TV.
We had 39,743,000 shares of our common stock issued and outstanding before the closing of the transactions contemplated by the Share Exchange Agreement. Upon the closing of the transactions, we issued 7,000 shares of our common stock to Bin Li, our Director and the former sole shareholder of Vallant. Mr. Li is the beneficial owner of 2,000,000 additional shares of our common stock. The 7,000 shares were issued in reliance upon an exemption from registration pursuant to Regulation S promulgated under the Securities Act of 1933, as amended (the “Securities Act”). Currently, there were 39,750,000 shares of our common stock issued and outstanding.
The share exchange is being accounted for as a reverse merger, since the former sole shareholder of Vallant, Bin Li, acquired the majority of the Company’s common stock with the aim of completing the share exchange with Vallant, and Vallant is deemed to be the accounting acquirer in the reverse merger. Consequently, the assets and liabilities and the historical operations that will be reflected in the consolidated financial statements for periods prior to the Share Exchange Agreement will be those of Vallant and will be recorded at the historical cost basis. After the completion of the Share Exchange Agreement, the Company’s consolidated financial statements will include the assets and liabilities of Vallant, the historical operations of Vallant and its subsidiaries from the closing date of the Share Exchange Agreement.
On September 17, 2010, Vallant and the holders of 100% of the voting shares of Xi’An TV amended the various consulting agreements and equity pledge agreement dated December 28, 2009. According to the amended agreements, Xi’An TV will provide Vallant with 100% of its income. Xi’An TV shareholders now pledged 100% of their equity interests in Xi’An TV to Vallant to guarantee Xi’An TV’s performance of its obligations under the Business Operations Agreement. Upon executing these agreements, Vallant is deemed to have a 100 percent controlling financial interest in Xi’An TV for financial reporting purposes as a result of these agreements and Vallant having power over significant activities affecting Xi’An TV’s economic performance. During the six months ended December 31, 2010, $5,224,593, $324,145 and $(3,154,923) were reclassified to additional paid-in capital, accumulated other comprehensive income and accumulated deficit that are attributable to China Media Inc’s stockholders and non-controlling interest had a zero balance at December 31, 2010.
F-4
Principles of Consolidation
The condensed consolidated financial statements include the accounts of the Company and Xi’An TV, which is a variable interest entity with the Company as the primary beneficiary. In accordance with United States generally accepted accounting principles (“GAAP”) regarding “Consolidation of Variable Interest Entities”, the Company identifies entities for which control is achieved through means other than through voting rights (a "variable interest entity" or "VIE") and determines when and which business enterprise, if any, should consolidate the VIE. The Company evaluated its participating interest in Xi’An TV Media and concluded it is the primary beneficiary of Xi’An TV Media, a variable interest entity. The Company consolidated Xi’An TV Media and all significant intercompany transactions and balances have been eliminated.
Use of Estimates
The preparation of financial statements in conformity with United States generally accepted accounting principles (“GAAP”) requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes, including estimates of ultimate revenues and ultimate costs of film and television product, estimates of product sales that will be returned and the amount of receivables that ultimately will be collected, the potential outcome of future tax consequences of events that have been recognized in the Company’s financial statements and loss contingencies. Actual results could differ from those estimates. To the extent that there are material differences between these estimates and actual results, the Company’s financial condition or results of operations will be affected. Estimates are based on past experience and other assumptions that management believes are reasonable under the circumstances, and management evaluates these estimates on an ongoing basis.
Recent Accounting Developments
Effective July 1, 2009, in accordance with U.S. GAAP, the Company adopted the standard on consolidation as it relates to noncontrolling interests. The standard changed the accounting and reporting for minority interests, which were recharacterized as noncontrolling interests and classified as a component of equity. The standard requires retrospective adoption of the presentation and disclosure requirements for existing minority interests. All other requirements of the standard will be applied prospectively.
In June 2009, the FASB issued authoritative guidance on the consolidation of variable interest entities, which is effective for us in fiscal 2010. The new guidance requires revised evaluations of whether entities represent variable interest entities, ongoing assessments of control over such entities, and additional disclosures for variable interests. We adopted the amendment July 1, 2010 and it did not have any impact on the Company’s financial position or results of operations..
Other recent accounting pronouncements issued by the FASB (including its Emerging Issues Task Force), the American Institute of Certified Public Accountants, and the United States Securities and Exchange Commission did not or are not believed by management to have a material impact on the Company’s present or future financial statements.
2. Related Party Transactions
Mr. Dean Li, President and General Manager, had advanced $119,834 to the Company at December 31, 2010. The shareholder loan is free of interest with no maturity date.
The Company leased an office space from a related party with a monthly rent of approximately $1,000. The contributed rent for the six month period ended December 31, 2010 was approximately $6,000.
F-5
Forward Looking Statements
This quarterly report on Form 10-Q contains forward-looking statements that involve risks and uncertainties. These statements relate to future events or our future financial performance. In some cases, you can identify forward-looking statements by terminology including "could", "may", "should", "expect", "plan", "anticipate", "believe", "estimate", "predict", "potential" and the negative of these terms or other comparable terminology. These statements are only predictions. Actual events or results may differ materially.
While these forward-looking statements, and any assumptions upon which they are based, are made in good faith and reflect our current judgment regarding the direction of our business, actual results will almost always vary, sometimes materially, from any estimates, predictions, projections, assumptions or other future performance suggested in this report.
Results of Operations
Our results of operations are summarized below:
Results of Operations for the six months ended December 31, 2010 and 2009.
|
Six Months Ended
December 31,
2010
($)
|
Six Months Ended
December 31,
2009
($)
|
|||||||
|
Revenue
|
178,493 | 1,173,067 | ||||||
|
Cost of Revenue
|
159,099 | 1,173,067 | ||||||
|
Expenses
|
154,685 | 167,762 | ||||||
|
Net Loss
|
( 132,309 | ) | (167,762 | ) | ||||
|
Net Loss per Share - Basic and Diluted
|
(0.00 | ) | (0.00 | ) | ||||
|
Weighted Average Number Shares Outstanding - Basic and Diluted
|
39,750,000 | 39,750,000 | ||||||
3
We generated all of our revenue primarily by advertising revenue for the this six months ended December 31, 2010. Revenues decreased by $994,574 or 84.8% to $178,493 for the six months ended December 31, 2010 from $1,173,067 for the six months ended December 31, 2009. Last year revenue came from selling TV series. We did not sell any TV series during the six months period ended December 31, 2010.
Our cost of goods sold for the six months ended December 31, 2010 was $159,099, compared to $1,173,067 for the six months ended December 31, 2009, an decrease of $1,013,968 or approximately 86%. This is attributed to the client sold 'Hunting fox' and ' Love in Desert' at cost for $1,173,067 in 2009.
Our gross profit increased by $19,394 to $19,394 for the six months ended December 31, 2010 from $0 for the six months ended December 31, 2009. The increase was primarily due to the advertising revenue.
Total operating expenses for the six months ended December 31, 2010 was $154,685, compared to $167,762 for the six months ended December 31, 2009, an decrease of $13,077 or approximately 7.8%. The decrease was mainly due to reduction of depreciation expenses.
For the six months ended December 31, 2010 we incurred a net loss of $132,309. During the same period in 2009 we incurred a net loss of $167,762. Our net loss per share did not change during these periods at $Nil per share. Our total operating expenses for the six months ended December 31, 2010 were $154,685. During the same period in 2009 our operating expenses were $167,762.
Results of Operations for the three months ended December 31, 2010 and 2009.
|
Three Months Ended
December 31,
2010
($)
|
Three Months Ended
December 31,
2009
($)
|
|||||||
|
Revenue
|
178,493 | 1,173,067 | ||||||
|
Cost of Revenue
|
159,099 | 1,173,067 | ||||||
|
Expenses
|
-118,146 | 127,491 | ||||||
|
Net Loss
|
(98,727 | ) | (127,491 | ) | ||||
|
Net Loss per Share - Basic and Diluted
|
(0.00 | ) | (0.00 | ) | ||||
|
Weighted Average Number Shares Outstanding - Basic and Diluted
|
39,750,000 | 39,750,000 | ||||||
4
During the three months ended December 31, 210 we generated revenue primarily from advertising. Revenues decreased by $994,574 or 84.8% to $178,493 for the three months ended December 31, 2010 from $1,173,067 for the three months ended December 31, 2009. Last year’s revenues were the result of selling TV series developed by us. We did not sell any TV series during the three months period ended December 31, 2010.
Our cost of goods sold for the three months ended December 31, 2010 was $159,099, compared to $1,173,067 for the three months ended December 31, 2009, an decrease of $1,013,968 or approximately 86%. This is attributed to the client sold 'Hunting fox' and ' Love in Desert' at cost for $1,173,067 in 2009.
Our gross profit increased by $19,394 to $19,394 for the three months ended December 31, 2010 from $0 for the three months ended December 31, 2009. The increase was primarily due to the advertising revenue.
Total operating expenses for the three months ended December 31, 2010 was $118,146, compared to $127,491 for the three months ended December 31, 2009, an decrease of $9,345 or approximately 7.3%. The decrease was mainly due to reduction of depreciation expenses.
For the three months ended December 31, 2010 we incurred a net loss of $98,727. During the same period in 2009 we incurred a net loss of $127,491. Our net loss per share did not change during these periods at $Nil per share. Our total operating expenses for the three months ended December 31, 2010 were $118,146. During the same period in 2009 our operating expenses were $127,491.
Liquidity and Capital Resources
As of December 31, 2010 we had cash of $18,697 in our bank accounts and a working capital surplus of $1,116,664.
For the six months ended December 31, 2010, we had net cash inflow of $294,252 on operating activities, compared to net cash spending of $(520,707) on operating activities during the same period in 2009. It’s mainly due to collection of accounts receivable and customer deposits, offset by cash paid for film costs and operating loss.
During the six months ended December 31, 2010, we paid approximately $153,191 in investing activities, compared to $2,985,345 used in investing activities during the same period in 2009.
During the six months ended December 31, 2010, we spent net cash of $170,191 in financing activities, compared to net cash received of $129,816 from financing activities during the same period in fiscal 2009.
Our cash level decreased by $28,566 during the six months ended December 31, 2010.
We anticipate that we will meet our ongoing cash requirements by retaining income as well as through equity or debt financing. We plan to cooperate with various individuals and institutions to acquire the financing required to produce and distribute our products and anticipate this will continue until we accrue sufficient capital reserves to finance all of our productions independently.
We intend to meet our cash requirements for the next 12 months through retaining income generated from daily operations and partnerships with finance groups on television and movie projects.
Off-Balance Sheet Arrangements
We have no significant off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to stockholders.
Inflation
The amounts presented in the financial statements do not provide for the effect of inflation on our operations or financial position. The net operating losses shown would be greater than reported if the effects of inflation were reflected either by charging operations with amounts that represent replacement costs or by using other inflation adjustments.
Audit Committee
The functions of the audit committee are currently carried out by our Board of Directors, who has determined that we do not have an audit committee financial expert on our Board of Directors to carry out the duties of the audit committee. The Board of Directors has determined that the cost of hiring a financial expert to act as a director and to be a member of the audit committee or otherwise perform audit committee functions outweighs the benefits of having a financial expert on the audit committee.
5
Not applicable.
Evaluation of Disclosure Controls and Procedures
We maintain disclosure controls and procedures, as defined in Rule 13a-15(e) promulgated under the Securities Exchange Act of 1934 (the "Exchange Act"), that are designed to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission'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 required disclosure. We 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 December 31, 2010. Based on the evaluation of these disclosure controls and procedures, the Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective.
Management Report on Internal Control Over Financial Reporting
Our management is responsible for establishing and maintaining adequate internal control over financial reporting. Under the supervision and with the participation of our management, including our Chief Executive Officer and Chief 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 (“COSO”). Based on the evaluation performed, our management concluded that during the period covered by this report, our internal controls over financial reporting were effective.
During the quarterly period, we implemented the following measures to improve our internal control over financial reporting:
|
(1)
|
Engaged outside consultants to assist in our assessment of the effectiveness of the company’s internal controls over financial reporting; and
|
|
(2)
|
Developed and instituted new internal control procedures to strengthen our month-end close and financial reporting processes;
|
We believe these measures have strengthened our internal control over financial reporting and disclosure controls and procedures.
Changes in Internal Control
Except for the changes discussed above, there was no change in our internal control over financial reporting (as defined in Rule 13a-15(e) and Rule 15d-15(e) under the Exchange Act) that occurred during the quarterly period that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
6
We are not aware of any legal proceedings to which we are a party or of which our property is the subject. None of our directors, officers, affiliates, any owner of record or beneficially of more than 5% of our voting securities, or any associate of any such director, officer, affiliate or security holder are (i) a party adverse to us in any legal proceedings, or (ii) have a material interest adverse to us in any legal proceedings. We are not aware of any other legal proceedings that have been threatened against us.
None.
None.
None.
None.
|
Exhibit Number
|
Exhibit Description
|
7
SIGNATURES
Pursuant to the requirements of the Exchange Act, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
|
China Media Inc.
|
|
|
(Registrant)
|
|
|
/s/ Dean Li
|
|
|
Date: February 14, 2011
|
Dean Li
|
|
President, Chief Executive Officer
|
|
|
(Principal Executive Officer)
|
|
|
/s/ Ying Xue
|
|
|
Date: February 14, 2011
|
Ying Xue
|
|
Chief Financial Officer
|
|
|
(Principal Financial Officer and Principal Accounting Officer)
|
8