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EX-32.1 - EXHIBIT 32.1 - V Media Corpex32x1.htm

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 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, 2014
 
OR
 
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: 000-53027
 
V MEDIA CORPORATION
(Exact Name of Registrant as Specified in Its Charter)
 
Delaware
33-0944402
(State or Other jurisdiction of Incorporation or Organization)
(I.R.S. Employer Identification No.)

Dalian Vastitude Media Group
8th Floor, Golden Name Commercial Tower
68 Renmin Road, Zhongshan District
Dalian, P.R. China
 
116001
 
(Address of Principal Executive Offices)
(Zip Code)
 
 
86-0411-8272-8168
(Registrant’s Telephone Number, Including Area Code)
 
N/A
(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 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 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 definitions of “large accelerated filer”, “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one)
 
Large accelerated filer o           Accelerated filer o           Non-accelerated filer o            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 14, 2014, the Company had outstanding 27,590,701 shares of common stock, $0.0001 par value.
 




INDEX

 
Page
 
PART I    FINANCIAL INFORMATION
3
 
 
 
 
Item 1. Condensed Consolidated Financial Statements.(Unaudited)
3
 
 
 
 
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.
22
 
 
 
 
Item 3. Quantitative and Qualitative Disclosures About Market Risk.
30
 
 
 
 
Item 4. Controls and Procedures.
30
 
 
 
 
PART II  OTHER INFORMATION
31
 
 
 
 
Item 1. Legal Proceedings
31
 
 
 
 
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.
31
 
 
 
 
Item 6. Exhibits.
31
 
 
 
 
Signatures
32
 
 
 
2

 
INTRODUCTION
 
 
Use of Certain Defined Terms
 
In this Form 10-Q, unless indicated otherwise, references to:

●  
“We,” “us,” “our” and the “Company” refers to V Media Corporation and its subsidiaries.
 
●  
“Securities Act” refers to the Securities Act of 1933, as amended, and “Exchange Act” refer to the Securities Exchange Act of 1934, as amended;
 
●  
“China” and “PRC” refer to the People's Republic of China;
 
●  
“RMB” refers to Renminbi, the legal currency of China; and
 
●  
“U.S. dollar,” “$” and “US$” refer to the legal currency of the United States. For all U.S. dollar amounts reported, the dollar amount has been calculated on the basis that $1 = RMB 6. 1538 for June 30, 2014, and $1 = RMB 6.1538 for September 30, 2014, which were determined based on the currency conversion rate at the end of each respective period. The conversion rates of $1 = RMB 6.1266 is used for the condensed consolidated statement of operations and other comprehensive income (loss) and condensed consolidated statement of cash flows for the three months ended September 30, 2013, and $1= RMB6.1573 is used for the condensed consolidated statement of operation and other comprehensive income (loss) and condensed consolidated statement of cash flows for the three months ended September 30, 2014; both of which were based on the average currency conversion rate for each respective quarter.
 
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

Information contained in this report includes some statements that are not purely historical fact and that are “forward-looking statements” as defined by the Private Securities Litigation Reform Act of 1995.  These forward-looking statements are contained principally in the sections titled “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and are generally identifiable by use of the words “may,” “will,” “should,” “expect,” “anticipate,” “estimate,” “believe,” “intend” or “project” or the negative of these words or other variations on these words or comparable terminology.
 
The forward-looking statements herein represent our expectations, beliefs, plans, intentions or strategies concerning future events, including, but not limited to: our future financial performance; the continuation of historical trends; the sufficiency of our cash balances for future needs; our future operations; our sales and revenue levels and gross margins, costs and expenses; new product introduction, entry and expansion into new markets and utilization of new sales channels and sales agents; improvements in, and the relative quality of, our technologies and the ability of our competitors to copy such technologies; our competitive technological advantages over our competitors; brand image, customer loyalty and expanding our client base; the sufficiency of our resources in funding our operations; and our liquidity and capital needs.
 
Our forward-looking statements are based on our current expectations and beliefs concerning future developments, and there can be no assurance that any projections or other expectations included in any forward-looking statements will come to pass.  Moreover, our forward-looking statements are subject to various known and unknown risks, uncertainties and other factors that may cause our actual results, performance or achievements to be materially different from future results, performance or achievements expressed or implied by any forward-looking statements. 
 
Except as required by applicable laws, we undertake no obligation to update publicly any forward-looking statements for any reason, even


3

 
V MEDIA CORP. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
 
 
 
As of September 30
   
As of June 30
 
 
 
2014
   
2014
 
 
 
   
 
ASSETS
 
   
 
 
 
   
 
Current assets
 
   
 
Cash and cash equivalents
 
$
268,697
   
$
1,141,377
 
Restricted cash
   
2,697,500
     
2,882,750
 
Accounts receivable, net
   
4,283,819
     
3,796,095
 
Advance to suppliers, net
   
1,815,886
     
523,200
 
Loans receivable, net
   
614,530
     
689,291
 
Other current assets
   
36,124
     
90,577
 
Total current assets
   
9,716,556
     
9,123,290
 
 
               
Property, equipment and construction in progress, net
   
23,163,496
     
23,525,520
 
 
               
Other assets
               
Billboards use right, net
   
2,850,311
     
3,330,283
 
Loans receivable
   
22,332
     
152,276
 
Security deposits
   
2,014,894
     
2,010,019
 
Total other assets
   
4,887,537
     
5,492,578
 
 
               
Total Assets
 
$
37,767,589
   
$
38,141,388
 
 
               
LIABILITIES AND EQUITY
               
 
               
Current liabilities
               
Short term loans
 
$
15,876,250
   
$
15,876,250
 
Accounts payable
   
1,723,136
     
2,998,517
 
Bank acceptance notes payable
   
3,575,000
     
3,575,000
 
Other payables
   
1,628,840
     
1,609,876
 
Deferred revenues
   
1,998,366
     
1,692,272
 
Taxes payable
   
534,816
     
520,147
 
Due to related parties
   
521,185
     
415,685
 
Total current liabilities
   
25,857,593
     
26,687,747
 
 
               
Commitments and contingencies
               
 
               
Equity
               
Series A Preferred Stock, $0.0001 par value, 20,000,000 shares authorized,
         
 1,000,000 shares issued and outstanding
   
100
     
100
 
Common stock, $0.0001 Par value; 80,000,000 shares authorized;
               
 27,590,701 shares issued and outstanding
   
2,759
     
2,759
 
Additional paid-in-capital
   
8,450,820
     
6,820,820
 
Accumulated other comprehensive income
   
1,102,916
     
1,108,296
 
Retained earnings
   
642,939
     
1,603,424
 
Total V Media Corp. equity
   
10,199,534
     
9,535,399
 
Noncontrolling interest
   
1,710,462
     
1,918,242
 
Total equity
   
11,909,996
     
11,453,641
 
 
               
Total Liabilities and Equity
 
$
37,767,589
   
$
38,141,388
 
 
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
 
4

V MEDIA CORP. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
(UNAUDITED)
 
 
 
 
For the three months ended September 30,
 
 
 
2014
   
2013
 
 
 
   
 
 
 
   
 
Revenues
 
$
4,147,683
   
$
5,651,591
 
 
               
Cost of revenue
   
(3,164,138
)
   
(4,204,723
)
 
               
Gross profit
   
983,545
     
1,446,868
 
 
               
Selling, general and administrative expenses
   
(1,875,178
)
   
(1,274,850
)
 
               
Income (loss)  from operations
   
(891,633
)
   
172,018
 
 
               
Other income (expenses):
               
Interest income
   
35,485
     
21,689
 
Interest expense
   
(319,392
)
   
(254,148
)
Subsidy income
   
24,376
     
151,051
 
Other expenses
   
(16,276
)
   
(26,677
)
 
               
Total other income (expenses)
   
(275,807
)
   
(108,085
)
 
               
Income (loss) before income taxes
   
(1,167,440
)
   
63,933
 
 
               
Income tax provision
               
Current
   
711
     
88,669
 
Deferred
   
-
     
-
 
Total income tax provision
   
711
     
88,669
 
 
               
Net loss
   
(1,168,151
)
   
(24,736
)
 
               
Less: net income (loss) attributable to noncontrolling interest
   
(207,666
)
   
105,152
 
 
               
Net loss attributable to V Media Corp.
 
$
(960,485
)
 
$
(129,888
)
 
               
 
               
Net loss
   
(1,168,151
)
   
(24,736
)
 
               
Other comprehensive income
               
Foreign currency translation  gain (loss)
   
(206,807
)
   
34,434
 
 
               
Comprehensive income (loss)
   
(1,374,958
)
   
9,698
 
 
               
Less: comprehensive income (loss) attributed to noncontrolling interest
   
(409,207
)
   
110,838
 
 
               
Comprehensive loss attributable to V Media Corp.
 
$
(965,751
)
 
$
(101,140
)
 
               
Earnings (loss) per share
               
Basic and diluted
 
$
(0.03
)
 
$
(0.00
)
Weighted average number of common shares
               
Basic and diluted
   
27,590,701
     
27,550,701
 
 
 
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
5

V MEDIA CORP. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
 
 
 
 
For the three months ended September 30,
 
 
 
2014
   
2013
 
 
 
   
 
CASH FLOWS FROM OPERATING ACTIVITIES:
 
   
 
Net loss
 
$
(1,168,151
)
 
$
(24,736
)
Adjustments to reconcile net loss to net cash
               
   provided by operating activities:
               
Depreciation
   
444,092
     
757,312
 
Amortization
   
1,044,083
     
1,658,440
 
Provision for doubtful accounts-Accounts receivable
   
525,937
     
125,992
 
Provision for doubtful accounts-loans receivable
   
438,397
     
-
 
Changes in operating assets and liabilities
               
Accounts receivable
   
(1,013,380
)
   
(719,940
)
Advance to suppliers
   
(1,369,457
)
   
(756,530
)
Other current assets
   
54,423
     
(122,426
)
Security deposit
   
(4,872
)
   
7,835
 
Accounts payable
   
(1,274,674
)
   
(294,557
)
Other payables
   
18,937
     
(61,626
)
Deferred revenues
   
305,912
     
23,304
 
Taxes payable
   
14,661
     
149,016
 
 
               
            Net cash provided by (used in) operating activities
   
(1,984,092
)
   
742,084
 
 
               
CASH FLOWS FROM INVESTING ACTIVITIES:
               
Loans to third party, net
   
(156,319
)
   
127,768
 
Acquisition of billboards use rights
   
(564,293
)
   
(2,025,607
)
Purchase of property and equipment
   
(82,268
)
   
(108,083
)
 
               
            Net cash used in investing activities
   
(802,880
)
   
(2,005,922
)
 
               
CASH FLOWS FROM FINANCING ACTIVITIES:
               
Change in restricted cash
   
185,147
     
82,253
 
Net proceeds from capital contributions
   
1,624,100
     
-
 
Net proceeds from short-term bank loans
   
-
     
1,958,657
 
Net proceeds from (repayment of) related party loans
   
105,500
     
(37,950
)
Repayment of third party loans
   
-
     
(1,387,382
)
Repayment of long-term loans
   
-
     
(173,560
)
 
               
            Net cash provided by financing activities
   
1,914,747
     
442,018
 
 
               
EFFECT OF EXCHANGE RATE CHANGE ON
               
CASH AND CASH EQUIVALENTS
   
(455
)
   
8,212
 
 
               
NET DECREASE IN CASH AND CASH EQUIVALENTS
   
(872,680
)
   
(813,608
)
 
               
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD
   
1,141,377
     
2,148,321
 
 
               
CASH AND CASH EQUIVALENTS, END OF PERIOD
 
$
268,697
   
$
1,334,713
 
 
               
SUPPLEMENTAL CASH FLOW DISCLOSURES
               
   Income taxes paid
 
$
-
   
$
24,535
 
   Interest paid
 
$
319,277
   
$
232,771
 
 
 
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
 
6

 
V MEDIA CORPORATION AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS


NOTE 1 – ORGANIZATION, BASIS OF PRESENTATION AND LIQUIDITY
V Media Corp., (“the Company”), originally known as Golden Key International Inc., and then China New Media Corp., is a corporation organized under the laws of the State of Delaware in 1999.

Effective July 17, 2012, the Company changed its name from China New Media Corp. to V Media Corporation through a short form merger pursuant to Section 253 of the General Corporation Law of the State of Delaware by merging a wholly owned subsidiary of the Company into the Company, with the Company as the surviving corporation in the merger. The Company, along with its subsidiaries and VIEs, is engaged in the sale, construction and operations of outdoor advertising displays and other alternative media business. The Company is headquartered in Dalian, the commercial center of Northeastern China and has subsidiaries in Beijing, Shanghai and Tianjin.

Basis of presentation
 
The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with the rules and regulations of the Securities and Exchange Commission (“SEC”) for interim financial statements. Accordingly, they do not include all of the information and footnotes required by U.S. generally accepted accounting principles (“US GAAP”) for complete financial statements. In the opinion of management, all adjustments (consisting only of normal recurring adjustments) considered necessary for a fair presentation have been included. These condensed consolidated financial statements and notes should be read in conjunction with the audited consolidated financial statements and footnotes included in the Company’s annual report on Form 10-K for the fiscal year ended June 30, 2014 filed with the SEC on October 14, 2014. Operating results for the three months ended September 30, 2014 may not be necessarily indicative of the results that may be expected for the full year.

The condensed consolidated financial statements include the financial statements of the Company, its subsidiaries and VIEs.  All significant inter-company transactions and balances between the Company, its subsidiaries and VIEs are eliminated upon consolidation.

Liquidity and Capital Resources
 
We have historically funded our working capital needs from operations, advance payments from customers, bank borrowings, and capital from shareholders. Presently, our principal sources of liquidity are generated from loans from commercial banks and capital contributions from our majority shareholders Mr. Wang Guojun and Mrs. Ma Ming.  Our working capital requirements are influenced by the level of our operations, the numerical and dollar volume of our sales contracts, the progress of our contract execution, and the timing of accounts receivable collections.
 
 
7

 
V MEDIA CORPORATION AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS


 
Based on our current operating plan, we believe that our existing resources, including bank loans and bank notes payable and advances from customers and capital contributions from major shareholders will be sufficient to meet our working capital requirements for our current operations over the next twelve months. In order to fully implement our business plan and continue our growth, however, we will require additional capital either from our shareholders or from outside sources.  Our long-term liquidity will depend on our ability to refinance our debts. The Company’s management expects to be able to refinance all of our short term loans based on past experience and the Company’s good credit history. In July 2012, we signed an agreement with Bank of Asia, pursuant to which, the bank provided us with a RMB 22 million ($3.6 million) revolving credit line from July 25, 2012 to July 25, 2020. In September 25, 2014, the Company received RMB 10 million ( $1.63 million) from the Company’s majority shareholder Mr. Wang Guojun and Ms. Ma Ming( RMB 5 million each), In addition, Our major Shareholder, Mr. Guojun Wang has pledged to provide personal loans when necessary to provide us with sufficient liquidity for the next 12 months. The Company also will discontinue the less profitable business lines to increase the overall profitability of the Company.

Additionally, our Time Square billboard lease expired on August 31, 2014 and the lease was not renewed due to the recurring losses on this project. Management expects to save $3 million on this  lease payment annually on this project which will decrease approximately $1.8 million of our prior year loss from our the bottom line. Without this project, the Company expects to turn around and become profitable for the fiscal year ending June 30, 2015.

NOTE 2- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Principles of Consolidation
 
The accompanying unaudited condensed consolidated financial statements include the accounts of V Media Corp., its subsidiary, Hong Kong Fortune-Rich Investment Co., Ltd. (“Fortune Rich”) and its wholly-owned subsidiary Dalian Guo-Heng Management & Consultation Co., Ltd. (“Dalian Guo-Heng”), as well as Dalian Guo-Heng’s variable interest entity and Dalian Vastitute Media Group Co., Ltd. (“V-Media Group”). The noncontrolling interests of the variable interest entities represent the minority stockholders’ interest in V-Media Group’s majority owned subsidiaries. All significant inter-company balances and transactions have been eliminated in consolidation.

Use of Estimates
 
In preparing the consolidated financial statements in conformity with US GAAP, management makes estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the dates of the consolidated financial statements, as well as the reported amounts of revenues and expenses during the reporting years. Significant estimates, required by management, include the deferred tax assets, recoverability of long-lived assets, allowance for advance to suppliers and allowance for doubtful accounts. Actual results could differ from those estimates.
 
 
8

 
V MEDIA CORPORATION AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

 
Cash and Cash Equivalents
 
Cash and cash equivalents include cash on hand and demand deposits with a bank with an original maturity of less than three months. Since a majority of the bank accounts are located in PRC, those bank balances are uninsured.

Restricted Cash
 
As of September 30, 2014, the Company had restricted cash of $2.7 million. Restricted cash was associated with its bank acceptance notes payable. The banks require the Company to maintain a cash balance of a minimum of 50% of the balance of the notes payable as collateral (Note 9).

Accounts Receivable
 
Accounts receivable are recorded at net realizable value consisting of the carrying amount less an allowance for uncollectible amounts, as needed. If facts subsequently become available to indicate that the allowance provided requires an adjustment, then the allowance will be adjusted. The Company reviews its accounts receivable on a periodic basis and makes general and specific allowances when there is doubt as to the collectability of individual balances. In evaluating the collectability of individual receivable balances, the Company considers many factors, including the age of the balance, customer’s historical payment history, its current credit-worthiness and current economic trends. The allowance for doubtful accounts totaled $3,083,912 and $2,557,684 as of September 30, 2014 and June 30, 2014, respectively. Accounts are written off only after exhaustive collection efforts.

Advance to suppliers
 
The Company periodically makes advances to certain vendors for purchases of advertising materials and equipment and records those advances as advance to suppliers. We have annually recorded an allowance when there is doubt as to collectability. If facts subsequently become available to indicate that an allowance provided requires an adjustment, then the adjustment will be classified as a change in estimate. The allowance for doubtful accounts totaled $176,060 and $98,530 as of September 30, 2014 and June 30, 2014, respectively. Accounts are written off only after exhaustive collection efforts.

Revenue recognition
 
The Company recognizes revenues when advertisements are posted over respective contractual terms based on the schedules agreed with customers and collections are reasonably assured.
 
 
9

V MEDIA CORPORATION AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS


Income Taxes
 
The Company recognized deferred tax assets and liabilities based upon the expected future tax consequences of events that have been included in the financial statements or tax returns. Under this method, deferred income taxes are recognized for the tax consequences in future years of differences between the tax bases of assets and liabilities and their financial reporting amounts at each period end based on enacted tax laws and statutory tax rates applicable to the periods in which the differences are expected to affect taxable income. Valuation allowances are established, whenever necessary, against net deferred tax assets when it is more likely than not that some portion or all of the deferred tax asset will not be realized.

Recent Accounting Pronouncements
 
In August 2014, the FASB issued ASU No. 2014-15, “Disclosure of Uncertainties About an Entity’s Ability to Continue as a Going Concern” (“ASU 2014-15”), which requires management to perform interim and annual assessments of an entity’s ability to continue as a going concern within one year of the date the financial statements are issued and provides guidance on determining when and how to disclose going concern uncertainties in the financial statements. Certain disclosures will be required if conditions give rise to substantial doubt about an entity’s ability to continue as a going concern. ASU 2014-15 applies to all entities and is effective for annual and interim reporting periods ending after December 15, 2016, with early adoption permitted. The Company does not expect that the adoption of this standard will have a material effect on the Company’s consolidated financial statements.

In November 2014, FASB issued Accounting Standards Update No. 2014-16, Derivatives and Hedging (Topic 815): Determining Whether the Host Contract in a Hybrid Financial Instrument Issued in the Form of a Share Is More Akin to Debt or to Equity (a consensus of the FASB Emerging Issues Task Force). The amendments permit the use of the Fed Funds Effective Swap Rate (also referred to as the Overnight Index Swap Rate, or OIS) as a benchmark interest rate for hedge accounting purposes. Public business entities are required to implement the new requirements in fiscal years (and interim periods within those fiscal years) beginning after December 15, 2015. All other types of entities are required to implement the new requirements in fiscal years beginning after December 15, 2015,and interim periods beginning after December 15, 2016. The Company does not expect the adoption of ASU 2014-16 to have material impact on the Company's consolidated financial statement.
 
10

 
V MEDIA CORPORATION AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS


NOTE 3 - LOANS RECEIVABLE
 
The loans receivable include the following:
 
  
 
September 30,2014
   
June 30,2014
 
 
a
)
Dalian Qianbaihe Cloth Accessories Co.
 
$
235,974
   
$
235,974
 
 
b
)
Dalian Tianjun Trade Co.
   
260,000
     
260,000
 
 
c
)
Dalian Digital Media Co.
   
36,594
     
36,594
 
 
d
)
Beijing Cross-Strait Publishing Exchange Center
   
48,750
     
48,750
 
 
e
)
Dalian Culture and Broadcasting Corp
   
136,500
     
136,500
 
 
f
)
Dalian Bomeishiji Media Corp
   
145,645
     
145,645
 
 
g
)
Shenzhen Lianchuang Jianhe Corp
   
365,357
     
365,357
 
 
h
)
Bainianchahui Corp.
   
572,647
     
523,776
 
 
i
)
Wanjiada Commerce and Trade Co.
   
222,132
     
141,926
 
 
j
)
Beijing Dayang Hongye Building Decoration Engineering
   
121,875
     
121,875
 
 
k
)
Others
   
242,641
     
215,313
 
     
Total loans receivable
 
$
2,388,115
   
$
2,231,710
 
     
Doubtful accounts allowance
   
(1,751,253
)
   
(1,390,143
)
     
Net loans receivable
 
$
636,862
   
$
841,567
 
     
Net loans receivable – non current
 
$
22,332
   
$
152,276
 
     
Net loans receivable – current
 
$
614,530
   
$
689,291
 

a) The Company made $0.24 million loan to Dalian Qianbaihe Cloth Accessories Co. for one year from March 5, 2014 to March 4, 2015 with interest 10%. The loan has been reserved as part of the allowance for doubtful accounts.

b) The Company made the following loans to Dalian Tianjun Trade Co.: (1) $0.24 million (RMB 1.5 million) for one year from January 1, 2014 to December 31, 2015 which is classified as a long term asset and has been reserved in the provision for doubtful accounts. (2) One-year term loan from November 30, 2012 to October 29, 2013 in the amount of $0.49 million (RMB 3.0 million). The Company has been repaid $0.47 million (RMB2.9 million) as of June 30, 2014.  The remaining balance of $0.02 million (RMB 100,000) has been extended to October 31, 2014. However, Dalian Tianjun did not pay back the loan as of October 31, 2014 and the loan has been reserved as part of the allowance for doubtful accounts.

c) The Company made a non-interest bearing loan of $0.04 million to Dalian Digital Media Co. as of June 30, 2012. The loan is due on demand and bears no interest. The loan is fully reserved as part of the allowance for doubtful accounts.
 
11

 
V MEDIA CORPORATION AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS


d) The Company loaned $0.05 million to Beijing Cross-Strait publishing exchange center on November 20, 2011. The loan is due on demand and bears no interest. The loan is fully reserved as part of the allowance for doubtful accounts.

e) The Company loaned $0.14 million to Dalian Culture and broadcasting Corp in December 2012. In November, 2013, the loan was extended on November 21, 2013 for one year with the due date on October 31, 2014. The annual interest is 10%. However, the Company did no received the loan repayment before the report date, the loan is fully reserved as part of the allowance for doubtful accounts.

f) The Company loaned $0.15 million to Dalian Bomeishiji Media Corp for one year with the balance due on December 31, 2014. The annual interest is 10%. The loan is fully reserved as part of the allowance for doubtful accounts.

g) The Company loaned $0.37 million to Shenzhen Lianchuangjianhe Corp in 2013 which is due on demand and bear 10% annual interest.

h) The Company made the following loans to Bainianchahui Corp: (1) $0.26 million (RMB 1.57 million) for one year due on November 09, 2014. However, the Company did not receive the loan repayment before the report date, the loan is fully reserved. (2) $0.15 million (RMB 0.94million) for two years and is due on December 31, 2015. The loan has been classified as a long term receivable. Both loans bear annual interest of 10%. (3) $0.16 million (RMB 1.0 million) and are due on demand.

i) The Company loaned $0.22 million to Wanjiada Commerce and Trade Co. on June 27, 2014 which is due on demand with no interest.

j) The Company loaned $0.12 million to Beijing Dayang Hongye Building Decoration Engineering on July 10, 2013 which is due on demand with no interest. The loan is fully reserved as part of the allowance for doubtful accounts.

k) The Company has various loans of $0.24 million and $0.22 million to other third parties as of September 30, 2014 and June 30, 2014, respectively, which are due on demand and bear no interest.

NOTE 4 - MAJOR SUPPLIERS
 
During the three months ended September 30, 2014, two major suppliers provided approximately 36% of the Company’s purchase of raw materials, with each supplier accounting for 22% and 14%. During the three months ended September 30, 2013, two major suppliers provided approximately 68% of the Company’s purchase of raw materials, with each supplier accounting for 55% and 13%.
 
 
12

 
V MEDIA CORPORATION AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS


NOTE 5 - PROPERTY, EQUIPMENT AND CONSTRUCTION IN PROGRESS, NET
 
Property, equipment and construction in progress consist of the following:
 
 
 
September 30, 2014
   
June 30, 2014
 
Advertising equipment
 
$
33,088,038
   
$
33,088,038
 
Office equipment and furniture
   
878,775
     
904,450
 
Office building and Improvement
   
117,875
     
117,875
 
Transportation
   
1,653,165
     
1,666,891
 
         Subtotal
   
35,737,853
     
35,777,254
 
Less: Accumulated depreciation
   
(14,162,411
)
   
(13,855,225
)
Construction in progress
   
1,588,054
     
1,603,491
 
Total
 
$
23,163,496
   
$
23,525,520
 

Depreciation expense totaled $444,092 and $757,312 for the three months ended September 30, 2014 and 2013, respectively. Approximately $29.51 million of advertising equipment was pledged as collateral against various short term loans as of September 30, 2014.
 
Construction in progress mainly consists of billboards and other outdoor advertising platforms that are still under construction and have not been put in use.

NOTE 6 – SECURITY DEPOSITS
 
Security deposits are mainly comprised of deposits made to third parties to guarantee the Company’s outstanding loans.  Since it has been the Company’s policy to either roll-over a substantial amount of their existing loans or repay them and subsequently enter into a new loan with the same lender, security deposits have been recorded as long-term assets. (See note 8)
 
 
13

 
V MEDIA CORPORATION AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS


 
NOTE 7 - BILLBOARDS USE RIGHTS 
 
The Company makes payments for the rights to construct advertising equipment and post advertisements in various locations in the PRC, based on long-term contracts with local government authorities or other business entities. These payments are recorded as billboards use rights and amortized on a straight-line basis over the contract terms.

The Company also leased a billboard use right at Times Square in New York under a non-cancellable twelve-month operating lease commencing March 1, 2012 and signed an extension agreement to extend the lease through August 31, 2014, requiring a quarterly lease payment of $840,000 before September 1, 2013 and increasing to $870,000 afterward. The Company amortized the expense on a straight-line basis over the term of the leases. This lease has expired on August 31, 2014 and the lease was not renewed.

Lease expense recorded in cost of sales in connection with the Time Square billboard totaled $0.16 million and $0.87 million for the three months ended September 30, 2014 and 2013, respectively.
 
Amortization of billboard use rights for the three months ended September 30, 2014 and 2013 was $1,044,083 and $1,658,440, respectively.
The projected amortization expense as of September 30, 2014 attributed to future years is as follows:
 
12 months ending September 30,
 
2015
 
$
1,089,203
 
2016
   
782,053
 
2017
   
338,655
 
2018
   
247,619
 
2019
   
247,619
 
Thereafter
   
145,162
 
 
 
$
2,850,311
 
 
       
 The following is a schedule by year for future minimum payments under the billboard use right agreements at September 30, 2014:

12 months ending September 30,
 
 
2014
 
$
4,651,938
 
2015
   
438,541
 
2016
   
306,115
 
2017
   
250,774
 
 
 
$
5,647,368
 
 
14

 
V MEDIA CORPORATION AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS


 
NOTE 8 - SHORT TERM LOANS
 
The short term loans include the following:
 
 
 
September 30, 2013
   
June 30, 2014
 
a)  Loans payable to Shanghai Pudong Development Bank
 
$
1,950,000
   
$
1,950,000
 
 
               
b)  Loan payable to Dalian Bank the First Centre Branch
   
3,250,000
     
3,250,000
 
 
               
c)  Loan payable to Industrial and Commercial Bank of China
   
292,500
     
292,500
 
 
               
d)  Loan payable to Jinzhou Bank
   
1,625,000
     
1,625,000
 
 
               
e)  Loan payable to Dalian Bank Shenyang Branch
   
975,000
     
975,000
 
 
               
f)  Loan payable to Dalian Bank Shanghai Branch
   
471,250
     
471,250
 
 
               
g) Loan payable to Yingkou Bank
   
1,625,000
     
1,625,000
 
 
               
h) Loan payable to Jilin bank
   
1,625,000
     
1,625,000
 
 
               
i)  Loan payable to Guangdong Development Bank
   
2,437,500
     
2,437,500
 
 
               
j)  Loans payable to Agriculture and Commerce Bank
   
1,625,000
     
1,625,000
 
 
               
Total short term loans
 
$
15,876,250
   
$
15,876,250
 
 
               
a)
Loan payable to Shanghai Pudong Development bank is a one-year term loan from June 19, 2014 to June 18, 2015 for RMB 12,000,000 ($1.95 million) at a variable interest rate based on the interest rate set by the People’s Bank of China.  The effective rate is 7.5% per year.  This loan has been guaranteed by the Company’s major stockholders, Mr. Guojun Wang and Ms. Ming Ma as well as a Joint Venture Guarantee Group Co., LTD, an independent third party guarantee company.

b)
Loan payable to Dalian Bank the First Centre Branch is a one-year term loan from December 16, 2013 to December 15, 2014 in the amount of RMB 20,000,000 ($3.25 million) with a fixed interest rate of 8.4% per year. The Company pledged its brand trademark for the loan.

c)
Loan payable to Industrial and Commercial Bank of China was for a one-year term from August 29, 2013 to August 28, 2014, which was repaid on the due date. The Company obtained a new loan for the same amount from September 5, 2014 to September 5, 2015 at a variable interest rate based on the interest rate set by the People’s Bank of China.  As of September 30, 2014, the effective rate of the new loan is 7.2% per year. The Company pledged certain real estate property owned by the Company’s major stockholder as collateral
 
 
15

 
V MEDIA CORPORATION AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS


 
d)
 The Company obtained a loan from Jinzhou Bank in the amount of RMB 10,000,000 ($1.63 million) for a term from November 18, 2013 to November 17, 2014 with a fixed interest rate of 8.4% per year. The Company pledged part of its advertising equipment with a carrying value of RMB 31 million (approximately $5.0 million), and also is guaranteed by the Company's major stockholders, Mr. Guojun Wang and Ms. Ming Ma.  The loan has been repaid on November 17, 2014 (see Note 15).

e)
The Company obtained a loan from Dalian Bank Shenyang Branch in the amount of RMB 6,000,000 ($975,000) for a term from June 23, 2014 to June 22, 2015 with a fixed interest rate of 8.1% per year.   The loan is guaranteed by V-Media, and also guaranteed by the Company's major stockholders, Mr. Guojun Wang, Ms. Ming Ma, Ms. Caiqin Wang and Mr. Tao Sun.

f)
Loan payable to Dalian Bank Shanghai Branch is in the amount of RMB 2,900,000 ($471,250) for a term from December 3, 2013 to December 2, 2014 with a fixed interest rate of 7.8% per year. This loan is guaranteed by V-Media, and is also guaranteed by the Company's major stockholders, Mr. Guojun Wang, and Ms. Ming Ma.

g)
Loan payable to Yingkou bank consisted of two loans. One loan in the amount of RMB 5,000,000 ($0.81 million) from May 22, 2014 to May 21, 2015 with a fixed interest rate of 7.8% per year. Another loan is in the amount of RMB5, 000,000 ($0.81 million) from May 28, 2014 to May 27, 2015 with a fixed interest rate of 7.8% per year. Both loans have been guaranteed by Liaoning Baijia Financing Assurance Co.,Ltd, and one of the Company’s major stockholders,  Ms. Ming Ma. In the guarantee contract, the Company pledged part of its advertising equipment with a value of RMB15 million ($2.4 million) to Liaoning Baijia Financing Assurance Co., Ltd as additional collateral.

h)
Loan payable to Jilin Bank is a one-year term loan from June 26, 2014 to June 25, 2015 in the amount of RMB10,000,000 ($1.63 million) with a fixed interest rate of 7.8% per year. This loan has been guaranteed by the Company's major stockholders, Mr. Guojun Wang and Ms. Ming Ma as well as Dalian QianbaiHe Clothing accessories  Co., LTD. The Company pledged part of its advertising equipment to Dalian QianbaiHe Clothing accessories  Co., LTD as additional collateral.
 
16

 
V MEDIA CORPORATION AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

i)
Loan payable to Guangdong Development Bank is a one-year term loan from May 16, 2014 to May 15, 2015 in amount of RMB15,000,000 ($2.44 million) with a fixed interest rate of 8.1% per year . This loan has been guaranteed by Dalian Enterprise Credit Guarantee Co., LTD and the Company’s major stockholders, Mr. Guojun Wang and Ms. Ming Ma. In the guarantee contract, the Company pledged part of its advertising equipment to Dalian Enterprise Credit Guarantee Co., LTD as additional collateral.

j)
Loans payable to Agriculture and Commerce Bank are two one-year term loans, both from June 3, 2014 to June 2, 2015 in amount of RMB 5,000,000 ($0.81 million each) with a fixed interest rate of 7.8% per year. The loans have been guaranteed by a third party, Dalian High and New Technology Guarantee Investment Co., and the Company's major stockholders, Ms. Ming Ma. In the guarantee contract, the Company paid approximately $40,000 (RMB 250,000) guarantee fee, and pledged part of its advertising equipment to Dalian High and New Technology Guarantee Investment Co. as additional collateral.
 
NOTE 9 – BANK ACCEPTANCE NOTES PAYABLE
 
As of September 30, 2014 and June 30, 2014, the Company has bank acceptance notes payable in the amount of $3,575,000. The notes are guaranteed to be paid by the banks and are usually for a short-term period of time of three to six months (see Note 15). The Company is required to maintain cash deposits at a minimum of 50% of the total balance of the notes payable with the banks, in order to ensure future credit availability. As of September 30, 2014 and June 30, 2014, $2.7 million in restricted cash was associated with these notes payable.

NOTE 10 – SUBSIDY INCOME
 
Since one of the Company’s subsidiaries is located in a special economic development zone in Dalian City, the Company received a special tax subsidy of $24,376 and $151,051 from the local government for the three months ended September 30, 2014 and 2013, respectively.
 
17

 
V MEDIA CORPORATION AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS


NOTE 11 - RELATED PARTY TRANSACTIONS
 
Amounts due to related parties are as follows:
 
 
 
September 30, 2014
   
June 30, 2014
 
Wang, Caiqin
 
$
146,250
   
$
146,250
 
Ma, Ming
   
251,394
     
145,894
 
Wang, Guojun
   
123,541
     
123,541
 
Total
 
$
521,185
   
$
415,685
 

The above stockholders periodically provide funds for the Company’s operations for advertising material and equipment purchases. These amounts are generally unsecured, non-interest bearing and due on demand. 

NOTE 12 – TAXES
 
a)  
Corporate Income Tax
 
Significant components of the income tax provision were as follows:

  
 
For the three months ended September 30,
 
 
 
2014
   
2013
 
Current tax provision
 
   
 
Federal
 
$
-
   
$
-
 
State
   
-
     
-
 
Foreign
   
711
     
88,669
 
 
   
711
     
88,669
 
Deferred tax provision (benefit)
         
Operating loss carry forward
   
342,238
     
409,690
 
Allowance for operating loss carry forward
   
(342,238
)
   
(409,690
)
 
               
Income tax provision
 
$
711
   
$
88,669
 

The Company has several subsidiaries operating in different tax jurisdictions. The pre-tax earnings (loss) for the three months ended September 30, 2014 and 2013 are summarized below:

 
 
For the three months ended September 30,
 
Entities with taxable income
 
$
102,272
   
$
1,422,769
 
Entities with losses
   
(1,269,712
)
   
(1,358,836
)
Total income (loss) before taxes
 
$
(1,167,440
)
 
$
63,933
 

Current tax expense represents the tax effect calculated on the gain entities noted above at a statutory rate of 25%.  Deferred tax benefits attributed to the loss entities were fully reserved as part of the valuation allowance.
 
18

 
V MEDIA CORPORATION AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS


Tax calculation:
 
   
 
 
 
2014
   
2013
 
Current taxable income
 
$
102,272
   
$
1,422,769
 
NOL  applied
   
(99,430
)
   
(1,068,093
)
Net taxable income
   
2,842
     
354,676
 
Statutory rate
   
25
%
   
25
%
Income tax expense
 
$
711
   
$
88,669
 

United States
The Company is subject to income taxes on an entity basis on income arising in or derived from the tax jurisdiction in which each entity is domiciled.

V Media Corp., a Delaware corporation, has incurred a net operating loss for federal income tax purposes through September 30, 2014. The Company had loss carry forwards for U.S. federal income tax purposes available for offset against future taxable U.S income expiring through 2034 of approximately $5,284,000 and $5,116,000 as of September 30, 2014 and June 30, 2014, respectively. Management believes that the realization of the benefits from these losses appears uncertain due to the Company's limited operating history in the United States. Accordingly, a full valuation allowance has been provided against the deferred tax asset and no deferred tax asset benefit has been recorded for the US operation. The valuation allowance against the deferred tax asset was $1,796,624 and $1,739,330 as of September 30, 2013 and June 30, 2014, respectively.

Hong Kong
Fortune-Rich was incorporated in Hong Kong and has operations through its subsidiaries in the PRC, its only tax jurisdiction. Fortune-Rich did not earn any income that was derived in Hong Kong since incorporation and therefore was not subject to Hong Kong Profit tax. All Fortune-Rich and its subsidiaries’ income is generated in the PRC. Accordingly, its income tax provision is calculated based on the applicable tax rates and existing legislation, interpretations and practices in respect thereof.

PRC
 
a) Income Tax
Dalian Guo-heng and V-Media Group are governed by the Income Tax Law of the People’s Republic of China concerning the private-run enterprises, which are currently subject to tax at a statutory rate of 25% on net income reported after appropriated tax adjustments. Because of different tax jurisdictions’ restriction, the V-Media Group and its subsidiaries of Shenyang, Wangluo, Tianjin, Beijing and Shanghai have loss carryovers that can only be used to offset their own future taxable income. The loss carry forward for those subsidiaries amounted to $3,039,789 and $3,065,281 as of September 30, 2014 and June 30, 2014, respectively.
 
19

 
V MEDIA CORPORATION AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS


 
The Company periodically evaluates the likelihood of the realization of deferred tax assets, and reduces the carrying amount of the deferred tax assets by a valuation allowance to the extent it believes a portion will not be realized. The Company considers many factors when assessing the likelihood of future realization of the deferred tax assets, including its recent cumulative earnings experience, expectation of future income, the carry forward periods available for tax reporting purposes, and other relevant factors. For the three months ended September 30, 2014, management concluded the realization of PRC deferred tax assets is uncertain. Deferred tax assets amounted to 0.8 million and 0.8 million as of September 30, 2014 and June 30, 2014. The valuation allowance as of September 30, 2014 and June 30, 2014 was $0.8 million and $0.8 million, respectively.

b) Business Tax
Dalian Guo-heng, Dalian Vastitude Media Group Co., Ltd. and its five subsidiaries are also subject to 5% business tax and related surcharges levied on advertising services in China. Dalian V-Media’s another subsidiary is only subject to a 3% business tax. Total business tax expenses were $156,961 and $423,335 for the three months ended September 30, 2014 and 2013, respectively.

c) Taxes payable consisted of the following:

 
 
September 30, 2014
   
June 30, 2014
 
Business tax payable
 
$
(23,736
)
 
$
(23,736
)
Corporate income tax payable
   
244,373
     
243,587
 
VAT payable
   
169,011
     
179,896
 
Other
   
145,168
     
120,400
 
Total taxes payable
 
$
534,816
   
$
520,147
 

The Company recognizes interest and penalties accrued related to unrecognized tax benefits and penalties, if any, as income tax expense. There were no unrecognized tax benefits or penalties for the three months ended September 30, 2014. The Company files income tax returns with U.S. Federal Government, as well as Delaware State. The Company also files returns in foreign jurisdictions of Hong Kong and PRC. With few exceptions, the Company is subject to U.S. federal and state income tax examinations by tax authorities for years on or after 2009.

The Company’s foreign subsidiaries and VIEs also file income tax returns with both the National Tax Bureau and the Local Tax Bureaus. The Company is subject to income tax examinations by these foreign tax authorities. The Company has passed all tax examinations by both National and Local tax authorities since the inception of the Company in 2000.
 
20

 
V MEDIA CORPORATION AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS


 
NOTE 13 – EARNINGS PER SHARE
As of September 30, 2014, the Company had 1,000,000 shares of preferred stock issued and outstanding, that have not been included in diluted weighted average shares calculation because pursuant to the Merger agreement, no preferred shares can be converted into any securities.
 
NOTE 14 – SEGMENT INFORMATION
 
ASC 280, "Segment Reporting", establishes standards for reporting information about operating segments on a basis consistent with the Company's internal organizational structure as well as information about geographical areas, business segments and major customers in financial statements for details on the Company's business segments.
 
The Company is an outdoor advertising company in China which provides a full range of integrated outdoor advertising services including art design, advertising publishing, daily maintenance and technical upgrading. The Company's chief operating decision maker ("CODM") has been identified as the CEO who reviews the financial information of separate operating segments when making decisions about allocating resources and assessing performance of each entity. Based on management's assessment, the Company has determined that its operating segments can be categorized by geographic locations as well as the format of the outdoor media platforms.
 
The accounting policies of the segments are the same as those described in the summary of significant accounting policies. The CODM evaluates performance based on each reporting segment's revenues, cost of revenues, and gross profit. Selling expenses and G&A expenses are not separated reviewed to each segment. The CODM does not review balance sheet information to measure the performance of the reportable segments, nor is this part of the segment information regularly provided to the CODM.

 
For the three months ended September 30, 2014
 
 
Dalian District
 
Shenyang District
 
Beijing District
 
Tianjin District
 
Shanghai District
 
US Corporation
 
Total
 
Revenue
$
3,726,927
 
$
275,861
 
$
-
 
$
52,094
 
$
58,468
 
$
34,333
 
$
4,147,683
 
Cost of Revenue
 
(2,202,869
)
 
(218,152
)
 
(375,766
)
 
(65,638
)
 
(142,591
)
 
(159,122
)
 
(3,164,138
)
Gross Profit
$
1,524,058
 
$
57,709
 
$
(375,766
)
$
(13,544
)
$
(84,022
)
$
(124, 789
)
$
983,545
 
 
                                         
 
For the three months ended September 30, 2013
 
 
Dalian District
 
Shenyang District
 
Beijing District
 
Tianjin District
 
Shanghai District
 
US Corporation
 
Total
 
Revenue
$
4,395,343
 
$
153,123
 
$
785,311
 
$
43,315
 
$
49,499
 
$
225,000
 
$
5,651,591
 
Cost of Revenue
 
(2,593,121
)
 
(236,873
)
 
(330,422
)
 
(29,027
)
 
(131,257
)
 
(884,023
)
 
(4,204,723
)
Gross Profit
$
1,802,222
 
$
(83,750
)
$
454,889
 
$
14,288
 
$
(81,758
)
$
(659,023
)
$
1,446,868
 

NOTE 15 – SUBSEQUENT EVENTS
 
On Sept. 25, 2014, the Company increased its registered capital from 20 million RMB to 30 million RMB. This decision is based on the resolution of the Company’s recent shareholder meeting.⁠
In October 2014, the Company renewed RMB 4 million (approximately $650,000) of banker acceptance notes from Dongya Bank. The notes payable are currently due in April 2015.
 
On November 17, 2014, the Company repaid the loan from Jinzhou Bank of RMB 10,000,000 ($1.63 million). A new loan agreement to borrow the same amount is now under processing by Jinzhou Bank.
 
21

 
 
 
ITEM 2.    MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.
 
Overview and Corporate History
 
We are one of the fastest growing outdoor advertising companies in China. We own and operate various outdoor media network and provide a full range of integrated outdoor advertising services to our clients, including art design, advertising publishing, daily maintenance and technical upgrading. We believe our well-diversified outdoor advertising media network and our ability to provide advertising services on an integrated basis allow us to target and satisfy client needs at all levels. Founded in 2000, we have grown steadily and expanded our media network into Shenyang, Tianjin, Beijing and Shanghai from our headquarters in Dalian.
 
Our principal executive offices are located at Golden Name Commercial Tower 8th floor, 68 Renmin Road, Zhongshan District, Dalian, P.R. China.
 
We provide clients with advertising opportunities through our diverse media platforms, which include four major proprietary channels: (1) Street Fixture and Display Network, which includes bus and taxi shelters; (2) Mobile Advertisement displayed on mass city transit systems, which includes displays on city buses, metro-trains and train stations; (3) Billboard and Large LED displays along the city’s streets and highways; and (4) our proprietary and patented multi-media system, “City Navigator.”
 
We have experienced sustainable business growth in recent years. The size of our network has grown significantly over the years since the commercial launch of our advertising network. As of September 30, 2014, the number of bus and taxi shelters on which we operate and carry our advertisements is 810; the number of buses that carry our mobile advertisements is 336; the number of mobile displays through Dalian metro-trains is 38. As of September 30, 2014, we have installed 52 “City Navigator” units across Dalian urban area, 3 mega-screen (126 square meters to 400 square meters, approximately 1,356 square feet to 4,306 square feet) LED screens and 8 metal billboards in Dalian, 4 LED screens in the business district in Shenyang, 1 indoor LED screen (22 square meters, approximately 237 square feet) in Tianjin Railway Station, 1 mega-screen (150 square meters, approximately 1,614 square feet) LED screen in Beijing and 5 outdoor billboards in Shanghai. Our Time Square billboard lease has expired on August 31, 2014 and the lease was not renewed due to the recurring loss on this project.
 
On July 17, 2012, our name was changed from China New Media Corp. to V Media Corporation through a short form merger pursuant to Section 253 of the General Corporation Law of the State of Delaware by merging a wholly owned subsidiary of the Company into the Company, with the Company as the surviving corporation in the merger. Our trading symbol on the OTC Bulletin Board remains CMDI.OB.
 
22

 


 
 
 
Subsidiaries of V-Media
 
The following table sets forth information concerning V-Media’s subsidiaries:
 
Name of Subsidiary
V-Media’s
Ownership Percentage
 
Region of Operations
 
Primary Business
Shenyang Vastitude Media Co., Ltd.
100%
 
Shenyang
 
Advertising company
Tianjin Vastitude AD Media Co., Ltd.
100%
 
Tianjin
 
Advertising company
Dalian Vastitude Network Technology Co., Ltd.
100%
 
Dalian
 
Computer research and development, technical service and domestic advertisement
Dalian Vastitude Engineering & Design Co., Ltd.
83%
 
Dalian
 
Engineering, design and construction
Dalian Vastitude & Modern Transit Media Co., Ltd.
70%
 
Dalian
 
Advertising  company
Vastitude (Beijing) Technology Co.
60%
 
Beijing
 
Advertising company
Shanghai Vastitude Advertising & Media Co., Ltd.
100%
 
Shanghai
 
Advertising company
Vastitude Media –US  Corporation
100%
 
U.S.
 
Advertising company
 
Factors Affecting Our Results of Operations
 
Domestic Spending and Urbanization
 
The demand for our advertising time slots is directly related to the outdoor advertising spending in northeast China. Advertising spending is largely determined by the economic conditions in our region.  The Chinese government is aimed at building a domestic consumer-driven economy, which we believe, will continue to generate demand for outdoor advertising.  
 
Expansion of Our Market Presence by Launching City Navigator ® Networks in Other Major Commercial Cities
 
We believe our proprietary multi-media advertising system – City Navigator ® Network is one of the most advanced outdoor advertising platforms available in China. This system combines the latest LED displaying technology, internet and WI-FI technology, and has proven to be very effective in our competition to get access to top tier cities such as Shanghai and Beijing.
 
By using wireless access technology, our LED displays at bus and taxi shelters are able to display real time programs at the control of our centralized computer systems. It consists of a Wi-Fi receiver, large-screen LED display, and web-based touch-screen kiosk which provide the public with information on various aspects of the city life, including travel, traffic, restaurants, shopping, hotels, business, medical and education.  In addition, every City Navigator is equipped with Bluetooth, wireless access and printing technology. Users can either print the information or send the information to their cell phones or computers. As City Navigator® Network adopts Wi-Fi technology, users can enjoy its service from any area covered by its Wi-Fi signals.  We are aggressively expanding our media platform by launching City Navigator ® Networks in our target cities, such as Tianjin, Qingdao and Shanghai, to create our own cross-region advertising network and enhance our advertising distribution capacity.
 
Promotion of Our Brand Name to Attract a Wider Client Base and Increase Revenues
 
We promote our brand name, [国域无疆]TM, through both our own media channels and public channels in Northern China. We believe that the enhancement of public awareness to our brand name will help broaden our client base, especially in the new marketplace such as Shenyang and Tianjin. As we expand our advertising client base and promote public’s awareness to our brand, demand for time slots and advertising space on our network will continue to grow.
 
Upgrade of Our Outdoor Billboard Network with New Digital Display Technology
 
We intend to capitalize on recent advances in digital display technology, especially mega-screen LED displays, to meet major institutional clients’ needs. Because the LED displays can be linked through centralized computer systems to instantaneously change static advertisements, and are highly visible even during bright daylight, it improves the advertising effects remarkably.  We plan to build more mega-screen (100 square meters to 500 square meters, approximately 1,076.4 square feet to 5,382 square feet) LED displays at premier locations in our marketplace. 
 
23

 


 
 
As we continue to expand our network, we expect to face a number of challenges. We have expanded our network rapidly, and we, as well as our competitors, have occupied many of the most desirable locations in Dalian. In order to continue expanding our network in a manner that is attractive to potential advertising clients, we must continue to identify and occupy desirable locations and to provide effective channels for advertisers. In addition, we must react to continuous technological innovations in the use of wireless and broadband technology in our network, and changes in the regulatory environment, such as the regulations allowing 100% foreign ownership of PRC advertising companies and new regulations governing cross-border investment by PRC persons.
 
We believe that our business model and success in our regional market give us a considerable advantage over our competitors.  Our future growth will depend primarily on the following factors:
 
Overall economic growth in China, which we expect to contribute to an increase in advertising spending in major urban areas in China where consumer spending is concentrated;
 
Our ability to expand our network into new locations and additional cities;
 
Our ability to expand our sales force and engage in increased sales and marketing efforts;
 
Our ability to expand our client base through promotion of our services;
 
Our ability to expand our new systems including large-screen LED display network and City Navigator® Networks.
  
24

 
 
Results of Operations for the Three-Month Period Ended September 30, 2014 Compared to the Three-Month Period Ended September 30, 2013
  
Revenue   

The following table shows the revenues of the Company on a consolidated basis:

REVENUES
 
Three Months Ended September 30,
 
 
 
2014
   
2013
   
Difference
   
% Change
 
Dalian District
 
   
   
   
 
    Street Fixture and Display network
 
$
1,808,654
   
$
2,027,839
   
$
(219,185
)
   
(10.8
)%
    City Transit system Display network
   
968,212
     
935,855
     
32,357
     
3.5
%
Outdoor Billboards
   
710,620
     
1,359,305
     
(648,685
)
   
(47.7
)%
City Navigator
   
148,625
     
52,559
     
96,066
     
182.8
%
    Other service income(a)
   
90,816
     
19,785
     
71,031
     
359.0
%
Subtotal for Dalian District
 
$
3,726,927
   
$
4,395,343
   
$
(668,416
)
   
(15.2
)%
 
                               
Shenyang District
                               
    Street Fixture and Display network
 
$
80,516
   
$
9,162
   
$
71,354
     
778.8
%
Outdoor Billboards
   
195,345
     
143,961
     
51,384
     
35.7
%
Subtotal for Shenyang District
 
$
275,861
   
$
153,123
   
$
122,738
     
80.2
%
 
                               
Beijing District
                               
   Outdoor Billboards
 
$
-
   
$
785,311
   
$
(785,311
)
   
(100
)%
Subtotal for Beijing District
 
$
-
   
$
785,311
   
$
(785,311
)
   
(100
)%
 
                               
Tianjin District
                               
   Outdoor Billboards
 
$
52,094
   
$
43,315
   
$
8,779
     
20.3
%
Subtotal for Tianjin District
 
$
52,094
   
$
43,315
   
$
8,779
     
20.3
%
 
                               
Shanghai District
                               
Outdoor Billboards
 
$
58,468
   
$
49,499
   
$
8,969
     
18.1
%
Subtotal for Shanghai District
 
$
58,468
   
$
49,499
   
$
8,969
     
18.1
%
 
                               
United States
                               
Outdoor Billboards
 
$
34,333
   
$
225,000
   
$
(190,667
)
   
(84.7
)%
Subtotal for US District
 
$
34,333
   
$
225,000
   
$
(190,667
)
   
(84.7
)%
 
                               
Total Revenues
 
$
4,147,683
   
$
5,651,591
   
$
(1,503,908
)
   
(26.6
)%
 
(a) Other service income consisted of income from (i) Construction & Design service provided by Dalian Vastitute Engineering & Design Company and (ii) technique service provided by Dalian Vastitute Network Technology Company to outside customers.
 
25

 
 
Revenue
 
Revenues for the three months ended September 30, 2014 were $4,147,683, a decrease of $1,503,908 or 26.6%, from $5,651,591 for the three months ended September 30, 2013. The decrease in revenue was primarily attributable to the revenue decrease in Dalian, Beijing and the US , offset by revenue increase in Shenyang, Tianjin and Shanghai districts.

For three months ended September 30, 2014, sales in Dalian district, accounted for 89.9% of our total sales, decreased by $668,416, or 15.2%, to $3,726,927 from $4,395,343 for the three months ended September 30, 2013. The decrease is mainly the Company focuses their resources towards profitable subsidiaries and segments and thus the Company is downsizing its non-profitable subsidiaries. The Company may not renew billboard rentals that did not bring enough cash flow in the prior periods; instead, it will invest in business segments that have higher gross margins.
 
Sales in Tianjin district increased by 8,779, or 20.3%, to $52,094 from $43,315 for the three months ended September 30, 2014.Sales in Shanghai District increased $8,969 or 18.1% to $58,468 from $49,499 for the three months ended September 30, 2014.

Sales in Shenyang district increased $122,738 or 80.2% to $275,861 from $153,123 for the three months ended September 30, 2014. The increase was attributable to increased sales and marketing effort in local market.

Sales in Beijing district decreased by $785,311, or 100%, to $0 from $785,311 for the three months ended September 30, 2014. The reason of the decrease is that Beijing district has lost its only customer (of annual sales RMB 18 million) due to the lease expiration and that the client didn’t extend the contract due to expenditure control considerations.

Sales in the US decreased by $190,667, or 84.7% from $225,000 for the three months ended September 30, 2014. The Company has terminated the lease for the billboard in the US since it didn’t generate the level of revenue as the Company previously projected.

 
26

 
 
Cost of Revenue
 
Cost of revenue for the three months ended September 30, 2014 was $3,164,138, a decrease of $1,040,585 or 24.7%, from $4,204,723 for the same period ended September 30, 2013.  Decrease in cost of revenue is due to: (a) a reduction in depreciation of about $400,000. and (b) a reduction in amortization of about $610,000. The decrease is primarily due to the termination of the lease for the billboard located at Times Square. We experienced higher labor cost due to hiring experienced ads production staff and higher material costs charge due to price increase, but the effect is offset by the savings noted above.
 
COST OF REVENUES
 
Three Months Ended September 30,
 
 
 
2014
   
2013
   
Difference
   
% Change
 
Dalian District
 
   
   
   
 
      Street Fixture and Display network
 
$
947,959
   
$
1,181,316
   
$
(233,357
)
   
(19.8
)
      City Transit system Display network
   
632,191
     
598,120
     
34,071
     
5.7
%
      Outdoor Billboards
   
536,017
     
771,240
     
(235,223
)
   
(30.5
)%
      City Navigator
   
62,278
     
23,946
     
38,332
     
160.1
%
      Other service cost (b)
   
24,424
     
18,499
     
5,925
     
32.0
%
Subtotal for Dalian District
 
$
2,202,869
   
$
2,593,121
   
$
(390,252
)
   
(15.0
)%
 
                               
Shenyang District
                               
      Street Fixture and Display network
 
$
58,901
   
$
16,581
   
$
42,320
     
255.2
%
      Outdoor Billboards
   
159,251
     
220,292
     
(61,041
)
   
(27.7
)%
            Subtotal for Shenyang District
 
$
218,152
   
$
236,873
   
$
(18,721
)
   
(7.9
)%
 
                               
Beijing District
                               
      Outdoor Billboards
 
$
375,766
   
$
330,422
   
$
45,344
     
13.7
%
            Subtotal for Beijing District
 
$
375,766
   
$
330,422
   
$
45,344
     
13.7
%
 
                               
Tianjin District
                               
      Outdoor Billboards
 
$
65,638
   
$
29,027
   
$
36,611
     
126.1
%
            Subtotal for Tianjin District
 
$
65,638
   
$
29,027
   
$
36,611
     
126.1
%
 
                               
Shanghai District
                               
       Outdoor Billboards
 
$
142,591
   
$
131,257
   
$
11,334
     
8.6
%
             Subtotal for Shanghai District
 
$
142,591
   
$
131,257
   
$
11,334
     
8.6
%
 
                               
United States
                               
      Outdoor Billboards
 
$
159,122
   
$
884,023
   
$
(724,901
)
   
(82.0
)%
          Subtotal for United States
 
$
159,122
   
$
884,023
   
$
(724,901
)
   
(82.0
)%
 
                               
Total Cost of Revenue
 
$
3,164,138
   
$
4,204,723
   
$
(1,040,585
)
   
(24.7
)%

 (b) Other service cost incurred by Dalian Vastitute Engineering & Design Company and by Dalian Vastitute Network Technology Company when they provide Construction & Design service and technique service to outside customers, respectively.
 
27

 
Gross Profit
 
Our gross profit for the three months ended September 30, 2014 decreased by $463,323 or 32.0% to $983,545 from $1,446,868 for the same period in 2013. The decrease in gross profit was due to the decreased revenue during the three months ended September 30, 2014. Management is actively enforcing cost-saving measures which lead to decrease of cost and expenses in current quarter. With lower rental cost and production cost, we were able to improve gross margin. However, our gross margin during the three months ended September 30, 2014 and 2013 were 23.7% and 25.6%, respectively, the decrease is mainly due to the decrease of revenue.
 
Selling, General and Administrative Expenses
 
Selling, general and administrative expenses, totaled $1,875,178 during the three months ended September 30, 2014, an increase of $600,328 or 47.1%, compared to $1,274,850 for the same period ended September 30, 2013. The increase is mainly due to $840,000 increase in the provision for doubtful accounts, which generated from account receivable, advance to vendor and loans receivable would increase since the management has reassessed and updated its bad debt reserve policy. 
 
Other Expenses/Income, net
 
For the three months ended September 30, 2014, we had total other expenses of $275,807, an increase of $167,722 or 155.2%, compared with the other expenses of $108,085 during the same period of 2013.  The increase in net of other expense was mainly due to a $126,675 decrease in subsidy income during the period. The subsidy is a special tax subsidy for companies located in special economic development zone in Dalian City.
 
Total interest expense on the bank loans for the three months ended September 30, 2014 and 2013, amounted to $319,392 and $254,148, respectively, the increase is due to the increase in borrowing.
 
Net Loss Attributable to the Company
 
Net loss attributable to the Company was $960,485 for the three months ended September 30, 2014, as compared with the net loss of $129,888 during the three months ended September 30, 2013, representing an increase of $830,597 or 639.5%. The increase in net loss was mainly attributed to our decrease in revenue and increase in selling, general and administrative expenses.
 
Foreign currency translation adjustments

Our business operates primarily in Chinese Renminbi (“RMB”), but we report our results in U.S. Dollars. The conversion of our accounts from RMB to U.S. Dollars results in translation adjustments. As a result of a currency translation adjustment, our comprehensive loss was $965,751 during the three months ended September 30, 2014, and $101,140 during the three months ended September 30, 2013.

28

 
Liquidity and Capital Resources
 
We have historically funded our working capital needs from operations, advance payments from customers, bank borrowings, and capital contribution from shareholders. Presently, our principal sources of liquidity are generated from our operations and loans from commercial banks.  Our working capital requirements are influenced by the level of our operations, our sales contracts, the progress of our contracts execution, and the timing of accounts receivable collections.
 
Based on our current planned operations, we believe that our existing resources, including cash generated from operations, bank loans and bank notes payable and advances from suppliers will be sufficient to meet our working capital requirements for our current operations over the next twelve months. In order to fully implement our business plan and continue our growth, however, we will require additional capital either from our shareholders or from outside sources.  Our long-term liquidity will depend on our ability to refinance our debts. The Company’s management expects to be able to refinance its short term loans based on past experience and the Company’s good credit history. In July 2012, we signed an agreement with Bank of Asia, pursuant to which, the bank provides a RMB 22 million ($3.6 million) revolving notes payable credit line from July 25, 2012 to July 25, 2020. In September 25, 2014, the Company received RMB 10 million ( $1.63 million) from the Company’s majority shareholder Mr. Wang Guojun and Ms. Ma Ming( RMB 5 million each), In addition, our major shareholder, Mr. Guojun Wang has pledged to provide personal loans when necessary to provide us with sufficient liquidity for the next 12 months. The Company also will discontinue the less profitable business lines to increase the overall profitability of the Company.
 
Additionally, our Time Square billboard lease has expired on August 31, 2014 and the lease was not renewed due to the recurring loss on this project. The management expects to save $3 million lease payment annually on this project and will decrease approximately $1.8 million of our prior year loss from our the bottom line.. Without this project, the Company expects to turn around and become profitable for the fiscal year ending June 30, 2015.

As of September 30, 2014, the Company’s cash and cash equivalents amounted to $268,697, a decrease of $872,680 from $1,141,377 as of June 30, 2014.
 
Cash Flow from Operating Activities
 
Net cash used in operating activities was $1,984,092 for the three months ended September 30, 2014, a decrease of $2,726,176 from the net cash provided by operating activities of $742,084 for the three months ended September 30, 2013. The decrease was mainly due to the increase in net loss of $1,143,415, and decreases in depreciation and amortization of $927,577, accounts payable of $980,117, advance to suppliers of $612,927 and accounts receivable of $293,440, offset by an increase in provisions for doubtful accounts totaling $838,342.
 
Cash Used in Investing Activities
 
Net cash used in investing activities in the three months ended September 30, 2014 was $802,880 as compared to net cash used in investing activities of $2,005,922 for the three months ended September 30, 2013.  Cash used in investing activities in the current period was for acquisitions of new outdoor advertising platforms to expand our existing advertising network. The decrease in cash used in investing activities this period is mainly due to the termination of the billboard lease located at Times Square.
 
Cash Provided by Financing Activities
 
For the three months ended September 30, 2014, net cash provided by financing activities was $1,914,747 as a result of i) net proceeds from capital contributions of $1.6 million from the our majority shareholders Mr Wang Guojun and Ms. Ma Ming; ii) net proceeds from related party loans of approximately $0.1 million, and iii) net proceeds from restricted cash of $185,147. Net cash provided by financing activities was $442,018 for the three months ended September 30, 2013, primarily due to net proceeds from short-term bank loans of $1,958,657 partially offset by a $1,387,382 repayment of third party loans.

Application of Critical Accounting Policies
 
Management's discussion and analysis of its financial condition and results of operations are based upon our condensed consolidated financial statements, which have been prepared in accordance with United States generally accepted accounting principles (“US GAAP”). Our financial statements reflect the selection and application of accounting policies, which require management to make significant estimates and judgments. See Note 2 to our consolidated financial statements, “Summary of Significant Accounting Policies.”
  
29

 
 
Impact of Recent Accounting Pronouncements
 
The Company’s management does not believe that any recently issued, but not yet effective, accounting standards, if currently adopted, will have a material effect on the Company’s condensed consolidated financial position, results of operations, or cash flows.
 
Off-Balance Sheet Arrangements
 
We do not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition or results of operations.
 
ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
 
As a “smaller reporting company,” as defined by Item 10 of Regulation S-K, the Company is not required to provide this information.
 
ITEM 4.   CONTROLS AND PROCEDURES.
 
Evaluation of Disclosure Controls and Procedures
 
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 the design and operation of our disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended, as of the end of the period covered by this Quarterly Report on Form 10-Q (the “Evaluation Date”). The evaluation of our disclosure controls and procedures included a review of our processes and the effect on the information generated for use in this Quarterly Report on Form 10-Q. The purpose of this evaluation is to determine if, as of the Evaluation Date, our disclosure controls and procedures were operating effectively such that the information, required to be disclosed in our reports with the Securities and Exchange Commission (“SEC”) (i) was recorded, processed, summarized and reported within the time periods specified in SEC rules and forms, and (ii) was accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure.  
 
In light of the material weaknesses that were identified and described in our Annual Report on Form 10-K for the year ended June 30, 2014 which was filed with the Securities and Exchange Commission on October 14, 2014, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were not effective as of September 30, 2014.  

Changes in Internal Control over Financial Reporting
 
During the quarter ended September 30, 2014, we have
 
●           Continued our search for an experienced internal control manager for the Company to lead the testing and implementation of our accounting and internal control procedures.

●           Evaluated the roles of our existing accounting personnel and updated the reporting structure of our accounting staff .
 
●           Established a work plan to update the Company’s internal control procedures and policies.
 
●           Developed a preliminary staff  training program to all employees involved which objective is to enhance the staff’s awareness of the Company’s updated accounting policies and procedures and familiarity with US GAAP and SEC rules and regulations.
  
There were no other changes in our internal control over financial reporting identified in connection with the evaluation required by paragraph (d) of Exchange Act Rules 13a-15 or 15d-15 that occurred during our last fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
 
 
30

 
PART II - OTHER INFORMATION
 
 
ITEM 1. LEGAL PROCEEDINGS.
 
None for the period covered by this report
 
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

None for the period covered by this report.
 
ITEM 6. EXHIBITS.
 
(a) Exhibits.
 
 
31.1*
Certification of the CEO
31.2 *
Certification of the CFO
32.1 *
Certification of the CEO pursuant to 18 U.S.C. Section 1350 adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, as filed herewith.
32.2*
Certification of the CFO pursuant to 18 U.S.C. Section 1350 adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, as filed herewith.
101.*INS
XBRL Instance Document
101.*SCH
XBRL Taxonomy Extension Schema Document
101.*CAL
XBRL Taxonomy Extension Calculation Linkbase Document
101.*DEF
XBRL Taxonomy Extension Definition Linkbase Document
101.*LAB
XBRL Taxonomy Extension Label Linkbase Document
101.*PRE 
XBRL Taxonomy Extension Presentation Linkbase Document
__________________
 
 
* Filed herewith
 
 
31

 


 
SIGNATURES
 
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
 
Date:  November 19, 2014
 
 
V MEDIA CORPORATION
 
 
 
 
 
 
By:
/s/ Guojun Wang
 
 
 
Name:  Guojun Wang
 
 
 
Title:  Chief Executive Officer and Chairman
(principal executive officer and duly authorized officer)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
By:
/s/  Hongwen Liu
 
 
 
Name:   Hongwen Liu
 
 
 
Title:  Chief Financial Officer and Treasurer
(principal financial officer)
 
 
 
 
 

 
32

 


 
Exhibit Index
 
 

31.1*
Certification of the CEO
31.2 *
Certification of the CFO
32.1 *
Certification of the CEO pursuant to 18 U.S.C. Section 1350 adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, as filed herewith.
32.2*
Certification of the CFO pursuant to 18 U.S.C. Section 1350 adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, as filed herewith.
101.*INS
XBRL Instance Document
101.*SCH
XBRL Taxonomy Extension Schema Document
101.*CAL
XBRL Taxonomy Extension Calculation Linkbase Document
101.*DEF
XBRL Taxonomy Extension Definition Linkbase Document
101.*LAB
XBRL Taxonomy Extension Label Linkbase Document
101.*PRE 
XBRL Taxonomy Extension Presentation Linkbase Document
_______________
 
 
* Filed herewith

33