Attached files
file | filename |
---|---|
EX-32 - EXHIBIT 32.1 - Median Group Inc | ex321-033112cmg.htm |
EX-32 - EXHIBIT 32.2 - Median Group Inc | ex322-033112cmg.htm |
EX-31 - EXHIBIT 31.1 - Median Group Inc | ex311-033112cmg.htm |
EX-31 - EXHIBIT 31.2 - Median Group Inc | ex312-033112cmg.htm |
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 three month period ended March 31, 2012 |
|
[ ] | TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT |
For the transition period from [ ] to [ ] |
--------------------------------------------------------------------
Commission File Number: 000-50431
CHINA MEDIA GROUP CORPORATION
---------------------------------------------------------------------
(Exact name of small business issuer as specified in its charter)
Texas |
7310 |
32-0034926 |
----------------------- |
------------------------ |
---------------------- |
(State or other jurisdiction of incorporation or organization) |
(Primary Standard Industrial Classification Code Number) |
(I.R.S. Employer Identification No.) |
1402 Wan Chai Commercial Center, 204 Johnston Road, Wanchai, Hong Kong |
----- |
--------------------------------------------------------------------- |
---------------- |
(Address of Company's principal executive offices) |
(Zip Code) |
+011 852 3171 1208
-------------------------------------------------
(Company's Telephone Number, Including Area Code)
Not Applicable
(Former Name, Former Address and Former Fiscal Year if Changed Since Last Report)
Indicate by check 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 past 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 [ ]
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T ("232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). |
Yes [ x ] No [ ]
Indicate by check 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 "small reporting company" in Rule 12b-2 of the Exchange Act. (check one) |
Large Accelerated Filer [ ] Accelerated Filer [ ] Non-Accelerated Filer [ ] Smaller Reporting Company[ x ]
SEC 1296 (03-10) | Potential persons who are to respond to the collection of information contained in this form are not required to respond unless the form displays a currently valid OMB control number. |
|
Yes [ ] No[ x ]
The number of common equity shares outstanding as of April 30, 2012 was 554,132,450 shares of Common Stock, no par value. |
FORWARD-LOOKING STATEMENTS |
This quarterly report contains forward-looking statements as that term is defined in the Private Securities Litigation Reform Act of 1995. These statements relate to future events or our future financial performance. In some cases, you can identify forward-looking statements by terminology such as "may", "will", "should", "expects", "plans", "anticipates", "believes", "estimates", "predicts", "potential" or "continue" or the negative of these terms or other comparable terminology. These statements are only predictions and involve known and unknown risks, uncertainties and other factors, including the risks in the section entitled "Risk Factors", that may cause our or our industry's actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements. |
Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements. Except as required by applicable law, including the securities laws of the United States, we do not intend to update any of the forward-looking statements to conform these statements to actual results. |
Our financial statements are stated in United States Dollars and are prepared in accordance with United States Generally Accepted Accounting Principles. In this quarterly report, unless otherwise specified, all dollar amounts are expressed in United States Dollars. |
As used in this quarterly report, the terms "we", "us", "our", "CHMD", and "the Company" mean China Media Group Corporation and its subsidiaries unless otherwise indicated. |
PART I |
Item 1. | Condensed Consolidated Financial Statements |
China Media Group Corporation
Condensed Consolidated Financial Statements
March 31, 2012
(Unaudited)
(Expressed In United States Dollars)
Condensed Consolidated Balance Sheets as of March 31, 2012 and December 31, 2011 |
|
|
|
|
CHINA MEDIA GROUP CORPORATION |
CONSOLIDATED BALANCE SHEETS |
AS OF MARCH 31, 2012 AND DECEMBER 31, 2011 |
|
December 31, 2011 |
||||
Notes |
(Unaudited) |
(Audited) |
|||
ASSETS | US$ |
US$ |
|||
Current Assets: | |||||
Cash and cash equivalents | 45,237 |
15,600 |
|||
Due from related parties | 7 |
372,466 |
372,541 |
||
Prepayments, deposit and other receivables | 169,164 |
169,152 |
|||
--------------- |
--------------- |
||||
Total current assets | 586,867 |
557,293 |
|||
Non-current assets |
|||||
Property and equipments, net | 8 |
451 |
2,232 |
||
Advance payment for distribution rights | 9 |
69,000 |
69,000 |
||
Investment in shares | 16 |
81,556 |
81,556 |
||
--------------- |
--------------- |
||||
151,007 |
152,788 |
||||
--------------- |
--------------- |
||||
737,874 |
710,081 |
||||
========= |
========= |
||||
LIABILITIES AND STOCKHOLDERS' EQUITY | |||||
Current liabilities: | |||||
Other payables and accruals | 10 |
471,634 |
424,396 |
||
Short term debt | 11 |
100,000 |
100,000 |
||
Due to officer and directors | 12 |
449,548 |
448,145 |
||
Due to related parties | 13 |
1,714,692 |
1,656,981 |
||
Option liabilities | 236,504 |
236,504 |
|||
--------------- |
--------------- |
||||
Total current liabilities | 2,972,378 |
2,866,026 |
|||
--------------- |
--------------- |
||||
Long-term debts | 14 |
2,000,000 |
2,000,000 |
||
Stockholders' equity: | |||||
Common stock, no par value, 85,000,000,000 shares authorized, 554,132,450 (2011: 554,132,450) shares issued and outstanding | 4 |
7,773,902 |
7,773,902 |
||
Additional paid-in-capital | 1,799,358 |
1,799,358 |
|||
Shares to be issued | 52,510 |
52,510 |
|||
Comprehensive income | 65,885 |
66,176 |
|||
Accumulated deficits | (14,043,774) |
(13,966,347) |
|||
Uncontrolled interest | 117,615 |
118,456 |
|||
--------------- |
--------------- |
||||
Total stockholders' equity | (4,234,504) |
(4,155,945) |
|||
--------------- |
--------------- |
||||
737,874 |
710,081 |
||||
========= |
========= |
The accompanying notes are an integral part of these consolidated financial statements
F-3
CHINA MEDIA GROUP CORPORATION |
CONSOLIDATED STATEMENTS OF OPERATIONS |
FOR THE THREE MONTHS ENDED MARCH 31, 2012 AND 2011 |
(UNAUDITED) |
Three months periods |
|||||||||||||||||
Ended March 31 |
|||||||||||||||||
-------------------------------------------------- |
|||||||||||||||||
2012 |
2011 |
||||||||||||||||
----------------- |
--------------- |
||||||||||||||||
US$ |
US$ |
||||||||||||||||
Net revenue | 22,829 |
28,889 |
|||||||||||||||
Cost of revenue | (8,990) |
(12,559) |
|||||||||||||||
---------------- |
---------------- |
||||||||||||||||
Gross profit | 13,839 |
16,330 |
|||||||||||||||
Operating expenses: | |||||||||||||||||
Selling, general and administrative expenses | 48,307 |
68,646 |
|||||||||||||||
--------------- |
--------------- |
||||||||||||||||
Loss from operations before other expense | (34,468) |
(52,316) |
|||||||||||||||
Other income / (expenses) | |||||||||||||||||
Interest income | 33 |
- |
|||||||||||||||
Interest expenses | (43,833) |
(46,620) |
|||||||||||||||
----------------- |
----------------- |
||||||||||||||||
Net loss before uncontrolled interests | (78,268) |
(98,936) |
|||||||||||||||
Uncontrolled interest | 841 |
2,917 |
|||||||||||||||
----------------- |
----------------- |
||||||||||||||||
Net loss | (77,427) |
(96,019) |
|||||||||||||||
----------------- |
----------------- |
||||||||||||||||
Other comprehensive income | |||||||||||||||||
Foreign currency translation gain | (291) |
(146) |
|||||||||||||||
----------------- |
----------------- |
||||||||||||||||
Comprehensive loss | (77,718) |
(96,165) |
|||||||||||||||
========= |
========= |
||||||||||||||||
Basic and diluted loss per common share | (0.00) |
(0.00) |
|||||||||||||||
========= |
========= |
||||||||||||||||
Basic and diluted weighted average number of common shares * | 554,132,450 |
554,132,450 |
|||||||||||||||
========= |
=============== | ||||||||||||||||
* |
Weighted average number of shares used to compute basic and diluted loss per share for the three months ended March 31, 2012 and 2011 are the same since the effect of dilutive securities are anti-dilutive. |
|
F-4
CHINA MEDIA GROUP CORPORATION |
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY |
FOR THE YEARS ENDED DECEMBER 31, 2011 AND 2010 |
AND FOR THE THREE MONTHS ENDED MARCH 31, 2012 |
(UNAUDITED) |
Common |
Additional |
Total |
|||||||||
Stock |
Paid-in |
Comprehensive |
Shares to |
Accumulated |
Uncontrolled |
Stockholders' |
|||||
Shares |
Amount |
Capital |
Income |
be issued |
Deficit |
Interest |
Equity |
||||
US$ |
US$ |
US$ |
US$ |
US$ |
US$ |
US$ |
|||||
---------------- |
---------- |
-------------- |
--------------- |
------------- |
-------------- |
------------- |
--------------- |
||||
January 1, 2010 | 534,132,450 |
7,428,902 |
1, 760,874 |
44,148 |
- |
(8,269,302) |
147,975 |
1,112,597 |
|||
Amortization of options granted | - |
- |
38,484 |
- |
- |
- |
- |
38,484 |
|||
Comprehensive income | - |
- |
- |
23,028 |
- |
- |
- |
23,028 |
|||
Issuance of shares for acquisition of share investments | 20,000,000 |
345,000 |
- |
- |
- |
- |
- |
345,000 |
|||
Gain on disposal of subsidiary | - |
- |
- |
- |
- |
- |
5,110 |
5,110 |
|||
Net loss | - |
- |
- |
- |
- |
(5,597,741) |
(22,577) |
(5,620,318) |
|||
-------------- |
----------- |
-------------- |
--------------- |
------------- |
-------------- |
-------------- |
--------------- |
||||
Balance at December 31, 2010 | 554,132,450 |
7,773,902 |
1,799,358 |
67,176 |
- |
(13,867,043) |
130,508 |
(4,096,099) |
|||
Comprehensive income | - |
- |
- |
(1,000) |
- |
- |
- |
(1,000) |
|||
Shares to be issued for acquisition of share investments | - |
- |
- |
- |
52,510 |
- |
- |
52,510 |
|||
Net loss | - |
- |
- |
- |
- |
(99,304) |
(12,052) |
(111,356) |
|||
-------------- |
----------- |
-------------- |
--------------- |
------------- |
-------------- |
-------------- |
--------------- |
||||
Balance at December 31, 2011 | 554,132,450 |
7,773,902 |
1,799,358 |
66,176 |
52,510 |
(13,966,347) |
118,456 |
(4,155,945) |
|||
Comprehensive income | - |
- |
- |
(291) |
- |
- |
- |
(291) |
|||
Net loss | - |
- |
- |
- |
- |
(77,427) |
(841) |
(78,268) |
|||
-------------- |
----------- |
-------------- |
--------------- |
------------- |
-------------- |
-------------- |
--------------- |
||||
Balance at March 31, 2012 | 554,132,450 |
7,773,902 |
1,799,358 |
65,885 |
52,510 |
(14,043,774) |
117,615 |
(4,234,504) |
|||
======== |
======= |
======== |
========= |
======== |
======== |
======== |
========= |
The accompanying notes are an integral part of these consolidated financial statements.
F-5
CHINA MEDIA GROUP CORPORATION |
CONSOLIDATED STATEMENTS OF CASH FLOWS |
FOR THE THREE MONTHS ENDED MARCH 30, 2012 AND 2011 |
(UNAUDITED) |
For the Three
Months ended March 31, |
For the Three
Months ended March 31, |
||||
US$ |
US$ |
||||
-------------------- |
-------------------- |
||||
Cash flows from operating activities: | |||||
Net loss | (77,427) |
(96,019) |
|||
Adjustment to reconcile net loss to net cash used in operating activities: | |||||
Depreciation | 1,781 |
3,141 |
|||
Uncontrolled interest | (841) |
(2,917) |
|||
Option expenses for employee compensation | - |
- |
|||
(Increase) / decrease in assets and liabilities: | |||||
Prepaid expenses, deposit and other receivables | (12) |
(7,898) |
|||
Due from former subsidiary company | (41) |
13 |
|||
Due from related parties | 116 |
(27,625) |
|||
Accounts payable and accrued expenses | 47,238 |
51,578 |
|||
Option liabilities | - |
29,563 |
|||
Due to directors and officers | 1,403 |
(19,879) |
|||
Due to related parties | 57,711 |
76,412 |
|||
-------------------- |
-------------------- |
||||
Net cash provided by operating activities | 29,928 |
6,369 |
|||
-------------------- |
-------------------- |
||||
Cash flows from investing activities: | |||||
Purchase of property and equipment | - |
- |
|||
-------------------- |
-------------------- |
||||
Net cash used in investing activities | - |
- |
|||
-------------------- |
-------------------- |
||||
Cash flows from financing activities : | |||||
Issue of shares for acquisition of subsidiary | - |
- |
|||
-------------------- |
-------------------- |
||||
Net cash provided by financing activities | - |
- |
|||
-------------------- |
-------------------- |
||||
Net increase in cash and cash equivalents | 29,928 |
6,369 |
|||
Effect of exchange rate changes on cash and cash equivalents | (291) |
(146) |
|||
Cash and cash equivalents, beginning | 15,600 |
17,654 |
|||
-------------------- |
-------------------- |
||||
45,237 |
23,877 |
||||
============ |
============ |
||||
Supplemental disclosure of cash flow information: | |||||
Interests paid | 43,833 |
46,620 |
|||
============ |
============ |
||||
Income tax paid | - |
- |
|||
============ |
============ |
The accompanying notes are an integral part of these consolidated financial statements.
F-6
CHINA MEDIA GROUP CORPORATION |
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS |
NOTE 1 |
|
|
|
|
|
|
NOTE 2 |
|
|
|
|
|
|
|
F-7
CHINA MEDIA GROUP CORPORATION |
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS |
NOTE 2 |
|
Use of estimates |
|
|
|
|
|
Cash and Cash Equivalents |
|
Inventories |
|
Property & equipment |
|
|
Leasehold improvements |
5 years |
Furniture, fixture and equipment | 5 years |
Intangible Assets |
|
F-8
CHINA MEDIA GROUP CORPORATION |
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS |
NOTE 2 |
|
Income taxes |
|
|
|
|
|
|
Issuance of shares for service |
|
|
|
F-9
CHINA MEDIA GROUP CORPORATION |
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS |
NOTE 2 |
|
Foreign Currency Translation |
|
|
|
|
|
|
F-10
CHINA MEDIA GROUP CORPORATION |
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS |
NOTE 2 |
|
|
|
|
|
|
F-11
CHINA MEDIA GROUP CORPORATION |
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS |
NOTE 2 |
|
|
|
|
|
|
|
|
|
F-12
CHINA MEDIA GROUP CORPORATION |
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS |
NOTE 2 |
|
|
|
|
|
|
|
F-13
CHINA MEDIA GROUP CORPORATION |
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS |
NOTE 2 |
|
|
Accounting Standards Issued But Not Yet Effective |
|
|
|
Reclassifications |
Certain comparative amounts have been reclassified to conform to the current period's presentation. |
F-14
CHINA MEDIA GROUP CORPORATION |
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS |
NOTE 3 |
|
|
|
NOTE 4 |
|
Common Stock |
|
|
|
NOTE 5 |
|
Stock Options |
|
2002 Stock Option Plan Effective on October 11, 2002, the Company adopted the 2002 Stock Option Plan (the "2002 Plan") allowing for the awarding of options to acquire shares of common stock. This plan provides for the grant of incentive stock options to key employees and directors. Options issued under this plan will expire over a maximum term of ten years from the date of grant. |
|
|
|
F-15
CHINA MEDIA GROUP CORPORATION |
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS |
NOTE 5 |
|
|
|
|
Outstanding, December 31, 2010 | 19,000,000 |
Granted during the period | - |
Forfeited/lapsed during the period | - |
Exercised during the period | - |
--------------------------- |
|
Outstanding, March 31, 2012 | 19,000,000 |
================ |
Following is a summary of the status of options outstanding at March 31, 2012: | ||||||||
|
Exercisable Options |
|||||||
------------------------------------ |
---------------------------------------------------------------------- |
|||||||
Grant |
Exercise |
Number |
Average
Remaining |
Average Exercise Price |
Number |
Intrinsic Price |
||
4/16/2010 |
$0.010 |
19,000,000 |
3.04 |
$0.010 |
19,000,000 |
$0.00 |
|
The assumptions used in calculating the fair value of options granted using the Black-Scholes option pricing model are as follows: |
i) The outstanding 19,000,000 stock options granted on April 16, 2010 and will expire on April 16, 2015: |
|||||
Grant date: | 4/16/2010 |
||||
Risk-free interest rate |
3.25% |
||||
Expected life of the options | 5.00 years |
||||
Expected volatility | 250% |
||||
Expected dividend yield | 0 |
F-16
CHINA MEDIA GROUP CORPORATION |
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS |
NOTE 5 |
|
2007 Stock Incentive Plan |
|
|
|
|
|
|
F-17
CHINA MEDIA GROUP CORPORATION |
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS |
NOTE 6 |
|
a) |
|
b) |
|
c) |
|
NOTE 7 |
|
Due from related parties are summarized as follows: |
March 31, 2012 |
December 31, 2011 |
|||
US$ |
US$ |
|||
Advance to supplier | (a) |
255,095 |
254,985 |
|
Due from investment company | (b) |
21,634 |
21,860 |
|
Due from former subsidiary company | (c) |
95,737 |
95,696 |
|
------------------- |
------------------- |
|||
372,466 |
372,541 |
|||
=========== |
=========== |
a) |
|
b) |
|
c) |
|
NOTE 8 |
|
Property and equipment is summarized as follows: |
|
|
|||
US$ |
US$ |
|||
Cost | ||||
Furniture, fixtures and equipment | 4,824 |
4,824 |
||
Computers | 8,058 |
8,058 |
||
Automobile | 47,951 |
47,951 |
||
------------------- |
------------------- |
|||
60,833 |
60,833 |
|||
Accumulated depreciation | (60,382) |
(58,601) |
||
------------------- |
------------------- |
|||
Balance at end of period | 451 |
2,232 |
||
=========== |
=========== |
F-18
CHINA MEDIA GROUP CORPORATION |
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS |
NOTE 9 |
|
|
|
Within one month of signing the agreement, one million shares of the Company; |
* |
Within one month of receiving the prototype devices, one million shares of the Company; |
* |
Within one month of receiving the product from commercial production, two million shares of the Company; and |
* |
A royalty payment of 100,000 shares of the Company for every 5,000 devices sold for the next 3 years. |
|
NOTE 10 |
|
Other payables and accruals are summarized as follows: |
||||
March 31, 2012 |
December 31, 2011 |
|||
US$ |
US$ |
|||
Accrued salaries and wages | 25,740 |
25,715 |
||
Accrued interest | 20,294 |
17,294 |
||
Accrued accounting, legal and consulting fee | 261,824 |
245,323 |
||
Accrued office and related expenses | 3,753 |
3,685 |
||
Other payables | a |
140,411 |
112,775 |
|
Deposit from customers | 19,612 |
19,604 |
||
------------------- |
------------------- |
|||
Balance at end of period / year | 471,634 |
424,396 |
||
=========== |
=========== |
a) |
|
F-19
CHINA MEDIA GROUP CORPORATION |
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS |
NOTE 11 |
|
|
NOTE 12 |
|
|
NOTE 13 |
|
Due to related parties are summarized as follows: |
|
|
|||
US$ |
US$ |
|||
Due to shareholders | (a) |
1,555,380 |
1,497,634 |
|
Due to directors of subsidiary companies | (b) |
159,312 |
159,347 |
|
------------------- |
------------------- |
|||
1,714,692 |
1,656,981 |
|||
=========== |
=========== |
|
(b) The amount due to directors of subsidiary companies is interest free, unsecured and repayable on demand. |
F-20
CHINA MEDIA GROUP CORPORATION |
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS |
NOTE 14 |
|
|
|
|||
US$ |
US$ |
|||
Shareholder Loan | 2,000,000 |
2,000,000 |
||
=========== |
=========== |
|
NOTE 15 |
|
|
|
NOTE 16 |
|
|
|
|
There was no significant difference between reportable income tax and statutory income tax. The gross deferred tax asset balance as of December 31, 2011 and 2010 was approximately $4,694,677 and $4,624,137, respectively. A 100% valuation allowance has been established against the deferred tax assets, as the utilization of the loss carry-forwards cannot reasonably be assured. A reconciliation between the income tax computed at the Hong Kong and PRC China statutory rate and the Group's provision for income tax is as follows: |
|
|
||||
----------------------- |
-------------------- |
||||
Hong Kong statutory rate | 16.5% |
16.5% |
|||
Valuation allowance - Hong Kong rate | (16.5%) |
(16.5%) |
|||
PRC China Enterprise Income Tax | 25% |
25% |
|||
Valuation allowance - PRC rate | (25%) |
(25%) |
|||
---------------------- |
-------------------- |
||||
Provision for income tax | - |
- |
|||
============= |
============ |
F-21
CHINA MEDIA GROUP CORPORATION |
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS |
NOTE 18 |
|
For management purposes, the Group currently organized into three operating units - advertising, telecommunication devices, and other services. Turnover represents the net amounts received and receivable for goods sold or services provided by the Group during the period. These units are the basis on which the Group reports its primary segment information. Segment information about these businesses is presented below. |
Advertising |
Telecommunication Device |
Product Services |
Consolidated |
|||||||||
For the three months |
For the three months |
For the three months |
For the three months |
|||||||||
2012 |
2011 |
2012 |
2011 |
2012 |
2011 |
2012 |
2011 |
|||||
US$ |
US$ |
US$ |
US$ |
US$ |
US$ |
US$ |
US$ |
|||||
Turnover | 22,829 |
28,889 |
- |
- |
- |
- |
22,829 |
28,889 |
||||
======= |
======= |
======= |
======= |
====== |
====== |
========= |
========= |
|||||
Segment results | 12,998 |
13,413 |
- |
- |
- |
- |
12,998 |
13,413 |
||||
======= |
======= |
======= |
======= |
====== |
====== |
|||||||
Unallocated corporate income | 33 |
- |
||||||||||
Unallocated corporate expenses | (46,625) |
(62,812) |
||||||||||
-------------- |
-------------- |
|||||||||||
Loss from operations | (33,594) |
(49,399) |
||||||||||
Finance costs | (43,833) |
(46,620) |
||||||||||
-------------- |
-------------- |
|||||||||||
Loss for the period | (77,427) |
(96,019) |
||||||||||
========= |
========= |
|||||||||||
As at March 31 |
||||||||||||
2012 |
2011 |
|||||||||||
ASSETS | ||||||||||||
Segment assets | - |
9,881 |
285,061 |
355,152 |
- |
- |
285,061 |
365,033 |
||||
Unallocated corporate assets | 452,813 |
535,472 |
||||||||||
-------------- |
-------------- |
|||||||||||
Consolidated total assets | 737,874 |
900,505 |
||||||||||
========= |
========= |
|||||||||||
LIABILITIES | ||||||||||||
Segment liabilities | 117,615 |
127,591 |
- |
- |
- |
- |
117,615 |
127,591 |
||||
Unallocated corporate liabilities | 4,972,378 |
5,043,176 |
||||||||||
-------------- |
-------------- |
|||||||||||
Consolidated total liabilities | 5,089,993 |
5,170,767 |
||||||||||
========= |
========= |
|||||||||||
Depreciation of fixed assets | 1,682 |
2,797 |
99 |
343 |
- |
- |
1,781 |
3,140 |
||||
======= |
======= |
======= |
====== |
====== |
====== |
========= |
========= |
F-22
CHINA MEDIA GROUP CORPORATION |
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS |
NOTE 19 |
|
(a) |
Future minimum rental payments under non-cancelable operating leases for the three month ended March 31, 2012 and for the year ended December 31, 2011 are $73,616 and $84,977, respectively. |
(b) |
|
(c) |
|
(d) |
|
(e) |
|
NOTE 20 |
|
(a) |
|
(b) |
|
F-23
Item 2. | Management's Discussion and Analysis of Financial Condition and Results of Operations. |
Forward Looking Statements |
THE ASSUMPTIONS USED FOR PURPOSES OF THE FORWARD-LOOKING STATEMENTS SPECIFIED IN THE FOLLOWING INFORMATION REPRESENT ESTIMATES OF FUTURE EVENTS AND ARE SUBJECT TO UNCERTAINTY AS TO POSSIBLE CHANGES IN ECONOMIC, LEGISLATIVE, INDUSTRY, AND OTHER CIRCUMSTANCES. AS A RESULT, THE IDENTIFICATION AND INTERPRETATION OF DATA AND OTHER INFORMATION AND THEIR USE IN DEVELOPING AND SELECTING ASSUMPTIONS FROM AND AMONG REASONABLE ALTERNATIVES REQUIRE THE EXERCISE OF JUDGMENT. TO THE EXTENT THAT THE ASSUMED EVENTS DO NOT OCCUR, THE OUTCOME MAY VARY SUBSTANTIALLY FROM ANTICIPATED OR PROJECTED RESULTS, AND, ACCORDINGLY, NO OPINION IS EXPRESSED ON THE ACHIEVABILITY OF THOSE FORWARD-LOOKING STATEMENTS. WE CANNOT GUARANTY THAT ANY OF THE ASSUMPTIONS RELATING TO THE FORWARD-LOOKING STATEMENTS SPECIFIED IN THE FOLLOWING INFORMATION ARE ACCURATE, AND WE ASSUME NO OBLIGATION TO UPDATE ANY SUCH FORWARD-LOOKING STATEMENTS. |
Critical Accounting Policy and Estimates |
|
Overview |
|
|
|
|
|
|
2011 Products & Services Overview Although we have established 4 business units, we have only started activities in two of them; those are "Advertising", "Telecommunication and Mobile" and "Product Services". A brief review and description of these three business units' strategies and operations are described below. |
|
|
Telecommunications Unit |
|
|
Products Services Units |
|
Other Investments |
|
Marketing & Sales Overview Our plan is to work with advertising agents in Hong Kong and Guangdong initially to work on a plan to secure some outdoor media boards with the limited resources available to the Group. We will discuss with our contacts in Hong Kong and China regarding securing outdoor media boards. Once we have started some advertising boards and have secured certain minimum funding for the BRR program, we then plan to secure ad/sign placements in districts in China under our Great Wall of China Project. We plan to co-operate with international advertising firms to place out the advertising on these ad/sign placements on either an agent or outsourced basis. We will recruit a team to manage the 10 largest cities in China where we would secure, manage and administer ad/sign placements for these cities. For the other cities we will look for partners or agents to work with us to secure ad/sign placements. Once we have certain ad/sign placements network for the second-tier cities, we will approach advertising agencies to sell these ad/sign placements to their customers. For our M.A.G.I.C. Convergent devices, we will sell through distribution channels, network operators and small enterprises. We will approach distribution channels and network operators in Hong Kong and China, initially and then in other territories to sell the M.A.G.I.C. Device. We will also sell to certain enterprises that will take advantage of the special functions in M.A.G.I.C. Device and customize to their operational needs. Select firms that we will target are transportation and logistic companies, courier companies, and direct sales companies. We will also target corporate and financial executives to customize the M.A.G.I.C. Device to their requirements. To sell this high value product with innovative applications, we plan to employ business development teams focused on creating high-value strategic customers and business alliances. For our Products Services unit, we will work with our advertisers to cross promote and sell their products on our advertising platform, once we have built up. In some cases, we will look to develop our own brands. We will employ a small team to handle enquires and to provide support to our advertising customers. For our recently announced potential acquisition of A-Team Resources, the organization has an existing marketing and sales department / channels. We also plan to take much more of a focus on the China market and work together to open up additional growing markets. The potential acquisition is currently generating revenues and these revenues will be used to grow into additional markets. |
Industry Overview and Competition The key to our success in the advertising business is the occupation of prime advertising locations throughout China. The premium locations with heavy pedestrian traffic are not common but are the focus of all advertising agencies and media owners. However you need to have the outdoor media to be able to compete for the premium sites. Many of our competitors have established outdoor billboards to offer to their clients where it would be difficult to compete since they are already in the market place and working with advertising agents already. We will need to build up some outdoor media boards to show a presence in the market place before we can get commitments from advertising agents and customers. However, we believe there is ample room for our Company to grow in the China market. There are many competitors in the market place offering a variation of the M.A.G.I.C W3, however not one that offers full computer operability in full Windows 7 OS with phone functionality. With the emergence of newer convergent device technologies, there is an opportunity for us to offer convergent devices and applications and solutions that have more functionality than traditional mobile devices. The new devices are easier to integrate with existing data and video applications and systems, and are easier to maintain and administer. We believe that the rate of adoption of convergent device and its applications and solutions by corporate executives and innovative applications will accelerate the adaptation of our M.A.G.I.C. Convergent device is recognized as more secure, and more functional in internet-based applications. We believe mobile executives will recognize the benefit of having notebook functionality in a handheld device combined with video and data capabilities. |
Plan of operations OUR PLAN OF OPERATION FOR THE NEXT TWELVE MONTHS. We hope to generate additional revenues in the next twelve months by engaging business operations through internal growth and through strategic acquisitions and cooperative advertising agreements, as described more fully under "Overview" above. |
|
|
|
|
|
Results of operation. |
|
For the three months period ended March 31, 2012, the Group has realized revenue of $22,829 and a cost of revenue of $8,990, achieving a gross profit of $13,839. For the three month period ended March 31, 2011, the Group has realized revenue of $28,889 and a cost of revenue of $12,559 achieving a gross profit of $16,330. We hope to generate additional revenues when we begin to receive contracts from clients or through acquisitions. Depending upon the availability of operating capital, we intend to expand our operations in the next 12 months. |
For the three month period ended March 31, 2012, our gross profit was $13,839 and our total operating expenses were $48,307, all of which were selling, general and administrative expenses. We also had $43,833 in interest expenses, $33 in interest income and loss attributable to uncontrolled interests of $841, so that the net loss to our shareholders for the three months period ended March 31, 2012 was $77,427. This is in comparison to the same period ended March 31, 2011, where our gross profit was $16,330 and our total operating expenses were $68,646, all of which were selling, general and administrative expenses. We also had $$46,620 in interest expenses and loss attributable to uncontrolled interests of $2,917, so that the net loss to our shareholders for the three months period ended March 31, 2011 was $96,019. |
|
At present the Company does not have sufficient cash resources to provide for all general corporate operations in the foreseeable future. The Company will be required to raise additional capital in order to continue to operate in fiscal 2012. |
Going Concern |
|
|
|
Item 3. | Quantitative and Qualitative Disclosure About Market Risk. |
Quantitative and Qualitative Disclosures about Market Risk: |
|
Item 4. |
Controls and Procedures. |
Evaluation of Disclosure Controls and Procedures: |
|
Changes in Internal Controls over Financial Reporting: |
|
PART II - OTHER INFORMATION |
Item 1. |
Legal Proceedings |
None. |
Item 2. |
Unregistered Sales of Equity Securities and Use of Proceeds |
|
Item 3. |
Defaults Upon Senior Securities |
None. |
Item 4. |
Submissions of Matters to a Vote of Security Holders |
None. |
Item 5. |
Other Information |
None. |
Item 6. | Exhibits |
|
Description of Exhibit |
2.1 |
Shareholders' Agreement between Good World Investments Limited, Advance Tech Communications Sdn. Bhd. And ATC Marketing Limited(6) |
2.2 |
Sale and Purchase Agreement between Good World Investments Limited, Tidewell Limited and the Company(7) |
2.3 |
Sale and Purchase Agreement entered by Good World Investments Limited to acquire 5% equity interest in Advance Tech Communications Sdn. Bhd. (9) |
2.4 |
Sale and Purchase Agreement between Good World Investments Limited and Keen Star International (HK) Limited (8) |
2.5 |
Sale and Purchase Agreement between Good World Investments Limited and ECE Technologies Sdn. Bhd. (10) |
3.1 |
Articles of Incorporation (1) |
3.1.1 |
Certificate of Amendment to Articles of Incorporation (2) |
3.1.2 |
Certificate of Amendment to Articles of Incorporation, as amended.(5) |
3.2 |
Bylaws (1) |
10.3 |
2002 Stock Option Plan (3) |
10.4 |
2007 Stock Incentive Plan (4) |
31.1* |
Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. |
31.2* |
Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. |
32.1* |
Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. |
32.2* |
Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. |
|
Incorporated by reference to our Registration Statement on Form SB-2 as filed with the SEC on April 15, 2003. |
2. |
Incorporated by reference to our Current Report on Form 8-K as filed with the SEC on February 3, 2005. |
3. |
Incorporated by reference to our Registration Statement on Form SB-2 as filed with the SEC on April 15, 2003. |
4. |
Incorporated by reference to our Registration Statement on Form S8 as filed with the SEC on March 8, 2007. |
5. |
Incorporated by reference to our Registration Statement on Form SB-2 as filed with the SEC on March 16, 2007. |
6. |
Incorporated by reference to our Current Report on Form 8-K as filed with the SEC on May 26, 2009. |
7. |
Incorporated by reference to our Current Report on Form 8-K as filed with the SEC on September 22, 2010. |
8. |
Incorporated by reference to our Current Report on Form 8-K as filed with the SEC on April 14, 2011. |
9. |
Incorporated by reference to our Current Report on Form 8-K as filed with the SEC on February 22, 2011. |
10. |
Incorporated by reference to our Current Report on Form 8-K as filed with the SEC on March 16, 2012.. |
* Filed herewith. |
SIGNATURES |
|
China Media Group Corporation |
|
a Texas corporation | |
/s/ Cheng Pheng Loi | |
--------------------------------------- | |
Cheng Pheng Loi | |
Chief Executive Officer | |
China Media Group Corporation | |
a Texas corporation | |
/s/ Con Unerkov | |
--------------------------------------- | |
Con Unerkov | |
Chief Financial Officer |
In accordance with the Exchange Act, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated. |
By: |
/s/ Cheng Pheng Loi |
May 16, 2012 |
-------------------------------------------- | ||
Cheng Pheng Loi | ||
Its: | Principal executive officer, | |
President, Director |
By: |
/s/ Con Unerkov |
May 16, 2012 |
-------------------------------------------- | ||
Con Unerkov | ||
Its: | Chief financial officer, | |
Director |
By: |
/s/ Lam Pui Kit |
May 16, 2012 |
-------------------------------------------- | ||
Lam Pui Kit | ||
Its: | Secretary, Treasurer, | |
Director |
By: |
/s/ Mohd Khairudin Bin Ramli |
May 16, 2012 |
-------------------------------------------- | ||
Mohd Khairudin Bin Ramli | ||
Its: | Director | |